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Retail Sales in the UK Bounce Back

The latest figures from the Office of National Statistics show that retail sales in the UK started 2020 strongly. January gave the industry a much-needed boost following on from the worst year on record in 2019.

The Details 

The improvement seen in January was a healthy 0.9% when compared to the month before. This followed on from two successive months of falls, with December showing a drop of 0.6%. In addition, this was the biggest monthly increase since March last year.

These positive numbers came as a surprise to many analysts. However, the overall sales numbers for the last three months still show a fall. Declines across all sectors led to a drop of 0.8% in the quarter to January.

Sales of fuel dropped by 5.7% in the first month of 2020, while clothing fell by 3.9%. The lower sales of petrol and diesel reflected the biggest drop since March 2015. This has largely been put down to a combination of poor weather and rising fuel prices. 

Another interesting statistic showed that internet sales were up by 4.9%, when compared to last January’s numbers.

Why Was 2019 So Bad for Retail?

The latest numbers come after the British Retail Consortium announced that 2019 was possibly the poorest year for the country’s retailers since 1995. They said that the total sales figure was down by 0.1%, which was the first annual drop in sales for 25 years.

It should be noted that their numbers don’t include online retail sales. Yet, they show that the High Street suffered a difficult year in 2019. The crucial months of November and December were particularly disappointing, with a 0.9% decline in sales in the final two months of the year.

There appear to be a number of factors in this. These include modest wage increases, the on-going Brexit effect and low consumer confidence levels. Online shops have also hurt the High Street, with big name brands like Mothercare and Thomas Cook suffering financial meltdown.

Poor global economic growth and trade wars have also played their part in this poor year for British retailers. With numerous economies around the planet struggling to grow, many UK businesses have had to turn to international debt recovery methods.

The Possible Impact

These figures confirm that the High Street is still struggling, even if 2020 has started off more brightly than 2019 ended. It would be no great surprise to see more of the nation’s big chains run into financial issues this year.

In terms of the overall economy, these details may convince the Bank of England’s monetary policy committee to keep interest rates steady. Two members of the committee wanted to lower rates in January, but it is expected that no cuts are proposed in the March meeting.

With employment levels and wages picking up at the start of 2020, it is hoped that the retail industry continues to build on the gains made in January to enjoy a better year than it had in 2019.