Bargain-hunters boosted retail sales in January but experts warn high street is still struggling

A no-deal Brexit could see retailers go back into decline, the BRC said

Death of the UK high street: Retailers gone since 2008

Retail sales rose in January, following the worst December performance in 10 years, as shoppers sought out bargains in the sales, according to new data.

Total retail sales increased by 2.2 per cent year-on-year in January, following 0 per cent year-on-year growth the previous month, and marking the highest growth since June, the British Retail Consortium-KPMG retail sales monitor showed.

UK retail sales increased by 1.8 per cent in January on a like-for-like basis from the same month in 2018.

Helen Dickinson, chief executive of the BRC said the latest figures were "a welcome return to growth this month after December's disappointing sales figures".

She continued: "But while retail discounts helped tempt cautious consumers, there is no guarantee this momentum will continue after the sales have finished.

"And it will not just be brick-and-mortar stores looking nervously to the future, as online sales continued to grow below the long term trend.

"Furthermore, the risk of a disruptive no-deal Brexit could see these fortunes reversed."

Paul Martin, UK head of retail at KPMG said: "Following the worst December trading performance in a decade, January brought a welcome improvement with total retail sales up 2.2 per cent.

"Having said that, this increase points more to British shoppers' obsession of bagging a bargain and price inflation, rather than any real improvement, and these peaks and troughs continue to leave retailers feeling increasingly anxious.

"The colder weather and continual discounting drove up fashion sales, whilst the increased focus indoors also boosted furniture sales.

"However, not all categories or players have been so fortunate, and even online growth continued to slow."

Meanwhile, data from Barclaycard, showed consumer spending grew 2.9 per cent year-on-year in January, returning to modest growth following a dip in December.

Growth in consumer spending on essentials was stronger than non-essential spending growth, the company said.

Fashion retailers asked to explain how they sell clothes for prices as low as £2

Barclaycard's research found seven in 10 consumers said they have become much more careful to seek out value for money in the purchases they make.

Esme Harwood, director at Barclaycard, said: "Looking forward, consumers will continue to prioritise value for money, especially as many have concerns about potential price increases on everyday essentials."

Additional reporting by newswires

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