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COVID drags down UK retail sales for January

·Finance Reporter, Yahoo Finance UK
·2-min read
COVID restrictions hampered UK retail sales in January. Photo: Phil Noble/Reuters
COVID restrictions hampered UK retail sales in January. Photo: Phil Noble/Reuters

UK retailers are disappointed at lower-than-expected sales in January as shops felt the blow delivered by COVID restrictions, a survey shows.

Sales grew at an above average pace in the year to January, at 28% compared to 8% last month, according to the Confederation of British Industry’s (CBI) latest Distributive Trades Survey. But this compares sales with January 2021, when COVID restrictions required non-essential retail stores to close across the UK.

Almost a third of retailers said sales turned out poorly for the time of year, compared with fewer than a tenth who said they were strong.

Read more: Higher bills and savings: how to budget for price rises

Sales are expected to remain below seasonal norms in February.

"It was not surprising that retail sales dropped back below seasonal norms in January, given the spread of Omicron, the reintroduction of restrictions late last year and increased consumer caution," Ben Jones, lead economist at the CBI, said.

“Even as cases fall and Omicron-related restrictions are rowed back, retailers will be looking to the year ahead with a degree of concern.

“It is vital that the Government comes forward with measures to protect the most vulnerable consumers, who will struggle the most with anticipated price rises.”

Read more: Majority of Brits won’t be able to save in 2022 due to higher bills

Internet sales were broadly flat in the year to January for the second straight and are expected to remain like that in the year to February.

Growth in orders placed with suppliers fell sharply, to 17% from 55% in December, although that is expected to pick up again next month.

The survey was conducted between 22 December and 18 January and was based on a total of 101 businesses replies, including 42 retail chains.

Watch: How to save money on a low income

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