Retail improves as housing boom boosts spending

Retail spending grew at its best rate since March 2010 as effects of the booming housing market began to trickle into the wider market.

The British Retail Consortium (BRC) and KPMG said total sales in January rose 5.4% on a year ago, thanks to a strong month for homewares and furniture businesses.

However it was not all good news across the sector, with grocers again squeezed.

KPMG head of retail David McCorquodale said: "Other than the grocers, retailers will feel heartened by these post-Christmas figures.

"The divide between food and non-food is stark, with the battle for market share in food remaining ferocious, customer loyalty fickle and cost deflation being passed through to the consumer."

On a like-for-like basis, sales across the retail sector were 3.9% higher than a year ago during the month. In the three months to January the figure was 1.7% higher, with non-food stores up 4% and food outlets down 1.2%.

The furniture and flooring sector achieved its best growth since April 2006, with bedroom products and sofas doing particularly well.

BRC director general Helen Dickinson said: "With a record number of people now in work and the continued recovery in the housing market we have seen very strong performances in furniture and other non-food items.

"These figures are better than expected given the continued squeeze on personal finances but official figures show that this is not built on personal debt, which remains below pre-recession levels."