Total retail sales rose by 2.1% in January according to the latest figures from the British Retail Consortium. On a like-for-like basis sales fell by 0.3%. On both measures it was the second-worst January, after January 2010, since the survey began in 1995.  Grocery sales were particularly hard-hit after their Christmas boost and non-food also weakened and any gains were largely driven by widespread heavy discounting in clearance sales. For clothing, footwear and homewares, January was worse than December, especially for larger purchases, hit by consumer caution.

Non-food non-store (internet, mail-order and phone) sales growth slowed again after picking up sharply in December. Sales were 11.3% up on a year ago, less than December’s 18.5% gain but similar to the 12.3% in January 2011.

Conditions in the retail sector continue to remain challenging and after the temporary respite offered by Christmas, consumers are facing up to uncertain times. Survey data has turned out weaker than previously anticipated and signals a slowdown in activity.  High levels of inflation, low earnings growth, rising unemployment, fears about job security and the impact of fiscal consolidation is taking its toll on spending.  Consumer confidence remains at low levels.

According to the latest figures from the Local Data Company, vacancy rates are now at 14.3%, while in some high street vacancies are as high as one in three shops. Figures from Deloitte revealed that profit warnings in the final quarter hit a ten-year-high. Retail was the worst hit sector.