Page last updated at 07:26 GMT, Tuesday, 10 February 2009

UK retail sales 'rose in January'

Sale sign
The January sales saw heavy discounting by many retailers

Sales of retail goods rose in January, the British Retail Consortium (BRC) has said, after shops cut prices to encourage consumers to keep spending.

On a like-for-like basis, retail sales rose 1.1% compared with a year earlier, the biggest increase since May 2008.

The strong overall performance was driven by food sales, which rose 5.1%. Sales of non-food items fell by 1.6%.

However, the BRC warned that economic conditions remained weak, and January's sales rise could be "just a blip".

By the end of January, sales growth had weakened as clearances ended, the BRC said.

Sales of clothing, footwear, homewares, and health and beauty products all fell.

Overall sales, which include the impact of new stores, rose by 3.2%, with food sales up 6.8% and non-food sales rising 0.8%.

Results 'skewed'

"These surprisingly good figures give some reason for optimism," said Stephen Robertson at the BRC, before sounding a more cautionary note.

"But the fundamentals haven't changed. Job fears are mounting. Consumer confidence is at record lows. It remains to be seen whether January's discount driven growth was just a blip."

Helen Dickenson at consultancy firm KPMG, which compiles the figures in conjunction with the BRC, also emphasised the impact of discounts.

"The results are heavily skewed by the continuation of a short-lived pick up in spending immediately after Christmas," she said.

The BRC/KPMG Retail Sales Monitor covers the four weeks between 4 January and 31 January.

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