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Industry News

Published on February 16th, 2018 | by The GC Team

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ONS predicts continued slowdown in retail sector

New Year resolutions to get fit and lose weight appear to have helped lift retail sales in January as strong growth was recorded in the sporting equipment category, but the overall picture for retail is one of slow growth.

Data released today by the Office for National Statistics showed a 1.6% rise in year-on-year sales growth in January, with the non-food sector propping up ailing food sales.  

Growth in food stores fell by 0.9%, contributing to the slowdown in all retailing year-on-year, but growth of 2.6% in non-food stores more than compensated for the fall.

The underlying pattern in retail sales, as suggested by the three-month on three-month measure, is however one of slow growth. The quantity bought increased by 0.1% – the lowest growth since April 2017.

Rhian Murphy, Senior Statistician at the Office for National Statistics, said: “Retail sales growth was broadly flat at the beginning of the New Year with the longer-term picture showing a continued slowdown in the sector. This can partly be attributed to a background of generally rising prices.

“Growth in the quantity of sporting equipment, games and toys being bought was offset by falling food sales when compared with the same month a year earlier.

“Sporting equipment sales have grown more than usual in January 2018, following an increased uptake for gym wear.”

Internet sales saw a decrease in the proportion of all seasonally adjusted retailing in January 2018 when compared with December 2017, accounting for 16.5% of all retail. The figure was, however, an increase on January 2017’s 15.8%.

With online sales falling back sharply in January with year on year growth of 9.1% against 19.2% in January 2017, David Jinks MILT, Head of Consumer Research at price comparison and delivery firm ParcelCompare, questioned if Britain was “falling out of love” with online shopping?

“The seasonally adjusted average weekly spending online decreased in January 2018 to £1,175.4 million compared with the £1,209.6 million reported in December 2017,” he said. “But before the High Street starts heaving a sigh of relief, remember that in January 2017 online e-commerce sales were only 15.8% of total sales, so the relentless rise in e-commerce is still continuing, albeit at a slower pace this month.

“Britain’s shoppers are pulling in their horns in general, with just a 1.6% growth in overall High Street sales volumes in January – so the online sales growth of 9.1% year-on-year is still ahead of brick and mortar growth.”

ONS data showed that, for every British pound spent in retail, 40p was spent in food stores, 42p in non-food stores, 9p in non-store retailing (e.g. mail order, stores that sell predominantly online, catalogues and market stalls), and 9p in petrol stations.

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