KPMG claims retail sales are on the up

Despite results appearing to be significantly better the figures do not mean consumer confidence has returned

KPMG has warned a rebound in overall retail sales in January masked continuing weakness in the non-food sector.

According to the market watcher’s latest data, January UK retail sales rose 1.1 per cent on a like-for-like basis, and 3.2 per cent on a total basis, from January 2008.

Food sales increased 5.1 per cent, but sales of non-food items fell by 1.6 per cent compared with a year ago, though by less than in December.

Non-food non-store sales for January were also higher than a year ago rising to 19.2 per cent, but were weaker than the 30 per cent gain in December when more people were using the internet for Christmas shopping.

Helen Dickinson, head of retail at KPMG, said: “Following three months' year-on-year declines in the total value of retail sales and seven months of declines in like-for-like sales, this appears to be significantly better but the figures do not mean consumer confidence has returned.

“The results are heavily skewed by food prices creeping back up again after the heavy promotional activity in December and by a reasonably strong performance in the first week of the month, caused by the continuation of a short-lived pickup in spending immediately after Christmas which ended by the second week.”

Stephen Robertson, director general for the British Retail Consortium, said: “These surprisingly good figures give some room for optimism. Overall sales growth turned positive and is higher than it's been since last May.

“Non-food sales fell more slowly, suggesting January clearance deals released pent-up demand and customers started to spend on goods they have been intending to buy for months.”

However, Robertson added: “The fundamentals have not changed. Job fears are mounting. Consumer confidence is at record lows. It remains to be seen whether January’s discount-driven growth was just a blip.”