Health check of sector seems to show thrifty approach still ingrained in shoppers

This article is more than 7 months old

This article is more than 7 months old

Britain’s retailers have yet to benefit from any post-election pickup in the economy amid signs that thrifty and environmentally aware consumers are reluctant to part with their money.

While business surveys have detected a “Boris bounce” after the decisive Conservative victory in December’s vote, the British Retail Consortium (BRC) said there had been only the faintest evidence that spending habits had changed.

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The monthly BRC/KPMG health check of the retail sector found that total sales rose by 0.4% in January but were unchanged once increases in floor space were taken into account.

Over the latest three months – a better guide to the underlying trend because it includes Black Friday bargains in November, the peak Christmas spending weeks in December and the January sales – food and non-food takings were down.

The tough times for retailers came despite a pickup in real incomes caused by wages rising faster than prices. The trend towards digital shopping has continued, with the proportion of non-food items being bought online increasing from 29.5% in January 2019 to 30.6% last month.

First estimates of how the UK economy performed in the final three months of 2019 will be published by the Office for National Statistics later on Tuesday, with economic analysts expecting little, if any, growth.

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Helen Dickinson, the BRC’s chief executive, said: “January saw a return to growth [for retail sales], however, recent political uncertainty and a decade of austerity appear to have ingrained a more thrifty approach to shopping among consumers.

“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.



“Across the UK, retailers are facing tighter margins as a result of weak consumer demand and increasing costs, including sky-high business rates.”