Published on February 11th, 2020 | by The GC Team0
Discounting and thrift on the high street
UK retail sales saw a marginal rise on a total basis in January, supposedly due to aggressive discounting by retailers during the month.
According to the British Retail Consortium and KPMG, total sales increased 0.4% against an increase of 2.2% in January 2019, but like-for-like sales were flat, following a rise of 1.8% in the preceding year.
Online, sales of non-food items increased by 2.5% against growth of 5.4% in January 2019, although the penetration rate continued to rise, up from 29.5% to 30.6%.
Paul Martin, Partner, UK Head of Retail at KPMG, said: “Consumer confidence has started to return post-General Election, but we have not experienced any major leaps for the sector yet.
“We have to remember this semi-positive performance will also be the result of aggressive discounts and consumers’ preoccupation with bagging a bargain. That’s not always good news when looking at bottom lines.”
Chief Executive of the BRC Helen Dickinson said recent political uncertainty and a decade of austerity appear to have ingrained a more thrifty approach among shoppers.
“Furthermore, as sustainability continues to rise up the agenda, many customers are switching to more environmentally friendly products or simply choosing to buy less. These effects are not just limited to the high street as growth in online purchases also slowed.”
“January is usually a quieter month for retail, and although static sales might not appear triumphant, at least it is no further deterioration,” added KPMG’s Martin.