By Daniel Hunter

Retailers have been left with mixed feelings after a strong start to the year petered out, leaving high street sales growth flat for January.

Figures released today (Monday) from BDO’s December High Street Sales Tracker show overall like-for-like sales in January dipped 0.4% year-on-year. But retailers could have been forgiven for expecting more from January after the first week of the year recorded like-for-like growth of 14.3% - the best weekly performance in three years.

Consumer confidence remains low but is creating a savvier army of consumers. The fashion sector, finishing 1.2% down for the month, illustrates this point well. Shoppers engaged in tactical buying, taking advantage of planned discounting on key lines at the beginning of the month which recorded 17.1% growth in the first week of January, but then eschewed less popular lines with heavier discounts at the end of the month as sale stock and choice ran low.

Homewares also had a poor month. Despite robust sales of smaller items like cutlery and crockery in the first two weeks, overall sales for the month were down 4% year-on-year as low consumer confidence put shoppers off big ticket items.

Retailers were also hit by the heavy snowfall in the third week of January, which put already cautious shoppers off visiting the high streets and shopping centres. This, and the trend towards ‘desk shopping’ or through mobile devices, also explains the rise in non- store activity which was up 41.5%.

Non-fashion sales grew (up 2.4%), ironically buoyed by the poor weather as people splashed out on outdoor gear to protect them from the snow.

“This really was a month of two halves. People spent their Christmas money and vouchers carefully at the beginning of the month and then, when faced with diminishing sale stock, terrible weather and bleak economic forecasts, battened down the hatches," Don Williams, National Head of Retail and Wholesale at BDO LLP, said.

“After a reasonable December and a strong start to January, retailers are likely to be disappointed the month wasn’t slightly more positive. With February a notoriously difficulty month for the sector, retailers will need to continue to negotiate the difficult consumer environment, but those that offer shoppers what they want and how they want it, backed up by exceptional service, will find that people are still willing to part with their money.”

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