Food sales increased 6.3% year-on-year over the three months to January, against a growth of 8.0% in January 2023, new data reveals.
In January, food was in growth year-on-year, according to the latest BRC-KPMG Retail Sales Monitor.
Sarah Bradbury, Chief Executive at IGD, said: “The year has started on a positive note. Despite most of the country bracing arctic conditions in the early part of January, grocery volumes have seen their largest year-on-year growth in over 12 months. This should, however, be viewed in the context of the market having endured a prolonged period of significant volume declines. Grocery sales remain in year-on-year growth, and with inflation slowing and further price cuts across the market, the rate of growth has remained relatively stable for the past three months.
“We can see that households have had to be mindful with their spending in January. Nearly a third of households with children at home claimed to have bought on credit over Christmas, so some households – particularly less affluent ones – will likely cut back a little to pay off this festive spending. While wage growth is now ahead of inflation, it will be some time before real incomes recover to their pre-crisis levels and consumer spending fully recovers.”
The data also reveals that total retail sales increased by 1.2% year on year in January, against a growth of 4.2% in January 2023.
Linda Ellett, UK Head of Consumer Markets, Leisure & Retail, KPMG, added: “It remains a difficult environment for retailers facing into significant downward pressures on demand, a strong promotional environment and uncertainty hitting supply chains due to rising geopolitical tensions.
“Retailers will be hoping that continued good news on the economy, coupled with the small boost given to some consumers as cuts in national insurance start to feed through to pay packets, will boost confidence and convert to sales.
“With increases in labour costs and business rates around the corner, retailers will be hoping for good news in the Chancellors’ upcoming Budget to give consumers that lift they need to start spending again.”