Weekly Retail & Leisure News - 22 February, 2016
Backing up the figures released last week by the BRC which showed continuing momentum for the UK retail sector, the ONS reports that January's retail sales grew by more than expected. Compared with last year, January sales were up by 5.2%, representing the 33rd consecutive month of growth. Total sales volumes rose 2.3% compared with December, boosted by post-Christmas discounting.
In other news, the UK unemployment rate fell to 5.1% in the three months to December, according to the ONS. More than 31.4 million people are now in work, the highest figure since records began. In addition, despite a recent slowdown in the rate of growth, wages increased 2% in the same period, and inflation remains at a very low level, despite a marginal increase in CPI to 0.3% in the year to January. The net result is continued real wage growth, which combined with extremely low energy prices this should continue to support consumer spending.
Elsewhere, Asda's prolonged sales slump continued with a modest performance over Christmas. The grocer's LFLs fell 5.8% in the 13 weeks to January 1, compared with a 4.5% decline in the previous quarter and a 4.7% slide before that, previously the worst performance in its 50-year history. Asda is likely to see further falls in underlying sales as it plans to continue to cut prices in order to compete with discounters such as Aldi, who last week announced that it will be opening 80 new stores this year, and saw sales growth of 13.7% in the 12 weeks to the end of January, according to Kantar World Panel.
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Director, Head of Retail Research (UK & EMEA)
+44 (0)20 3147 1155
Director, Head of UK Retail & Leisure
+44 (0)20 7318 7838