January blues: UK shoppers remained wary in run-up to Brexit

UK retail sales barely increased even after elections in December offered more certainty on Brexit, a survey showed.

London shoppers
Uncertainty over Brexit dented consumer confidence in the UK throughout 2019, leading to weak growth in retail spending [File: Yara Nardi/Reuters]

Shoppers in the United Kingdom kept a tight grip on their spending last month last month a survey showed on Tuesday, suggesting that shoppers have not felt the jump in confidence reported by many companies since December’s election broke the Brexit logjam.

Total retail spending edged up by an annual 0.4 percent in January, the British Retail Consortium (BRC) said. The UK left the European Union on January 31. 

The average increase over the past 12 months was just 0.2 percent, the lowest since BRC’s records began in 1995, while like-for-like retail sales in January, excluding changes in floor space from one year to the next, were flat.

“Although static sales might not appear triumphant, at least it is no further deterioration,” Paul Martin, a partner at accountancy firm KPMG which produces the survey with BRC said.

“Consumer confidence has started to return post-general election, but we have not experienced any significant leaps for the sector yet.”

Prime Minister Boris Johnson won a bigger-than-expected majority on the December 12 election which ended the short-term uncertainty about whether the UK would leave the EU at the end of January.

There have been signs that businesses and the housing market saw a jump in confidence and activity in January, although many companies are worried about the risk that the UK and the EU fail to get a trade deal by a December 31 deadline.

A separate survey by credit card firm Barclaycard, which covers a broader range of spending, was more upbeat, showing an annual 3.9 percent jump in spending by consumers in January, boosted by spending on petrol and at supermarkets.

Spending at cinemas jumped by 22 percent, helped by the release of the Oscar-nominated movie 1917, while travel agents and airlines also saw sales rise.

Barclaycard said consumer confidence in the British economy hit its highest level since September 2016 at 42 percent.

The survey was conducted between January 24 and January 27 by Longitude Research and included responses from 2,004 people.

Source: Reuters