UK January Retail Sales Worst In 15 Years

UK like for like sales fell by 0.7% on the previous year {rise of 1.1%} reports KPMG BRC retail. The cause was primarily the weather which shut down the tail end of the January sales and ended an latent desire for consumerism.

Even food, which had a bumper start to January with panic buying, fell away once the heavy snow came. Clothing and footwear made a partial recovery, people finding that summer shoes and T/shirts are far from ideal winterwear but understandably homewares and furniture were poor. The figures are also inflated in £ terms by being a 17.5% set vs a 15% VAT last year, which appears to show higher sales, but actually only shows higher tax.

The news that online sales were significantly up was a slight surprise. There was expectation that online bargains and wished for items that hadn't appeared in the stockings would drive sales.

What was a surprise was that Royal Mail was very badly affected by the snow. Much more so than during the recent strikes. Guarantees were suspended for days on end and mail backed up in depots, in stranded lorries and undelivered in mail centres. That must have put a dent into those figures that could have been even better. Maybe CU, currently in Moscow, could see how the Russians manager to deliver mail at -20*?

The Telegraph is one paper using the figures to ponder whether a double-dip is now much more likely. That may well be the case but it would foolish to consider these figures without allowing for the exceptional weather effects that led to them.