Official figures from the Office for National Statistics (ONS) showed that retail sales slipped back in January for the third consecutive month.
The report states that sales volumes, excluding fuel, were 0.2% lower in January than in December.
Online sales were reportedly up by 10.1% year-on-year, but fell in January by 7.2%. The dip in retail sales could be directly correlated with the uncertainty of Brexit and the increasing weakness in the pound.
The average store prices in UK retail stores increased by 1.9%, with the largest growth coming from the increase of fuel prices.
“In the three months to January, retail sales saw the first signs of a fall in the underlying trend since December 2013.” says Kate Davies, ONS Senior Statistician.
We have seen falls in month-on-month seasonally adjusted retail sales, both in conventional stores and online, and the evidence suggests that increased prices in fuel and food are significant factors in this slowdown.” she adds.
Uncertainty due to Brexit
According to the Financial Times, retail analysts noted that January was often not a good month for retailers. However, consumer spending has been the main constituent of Britain’s unexpected retail growth since the EU referendum in 2016.
The ONS report also shows that in 2015, for every pound spent in the retail industry, 40 pence was spent in food stores, 43 pence in non-food stores, 8 pence in non-store retailing and 9 pence in petrol stations.
Separate figures also by the ONS show that UK companies may not be receiving as great of a boost from overseas visitors. Inflation also rose to it’s highest level in over two years.
It will be interesting to see the finalised retail sales for February 2017, as Mastercard data recently revealed that Valentine’s Day spending had increased by 49% since 2014. Whilst majority of purchases were recorded in store, there was a 37% increase in the number of e-commerce transactions made from February 14th 2014 to 2016.
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