- Total sales volume rose 3.4 percent in January, ONS says
- Food establishments, such as supermarkets, contributed the most to volume growth.
Retail shopping recovered last month after a significant drop in December, raising hopes of a quick end to the UK’s economic downturn.
Total sales volume rose 3.4 percent in January, according to the Office for National Statistics, more than double economists’ forecasts for 1.5 percent growth.
It marks an improvement on the previous month’s 3.3 percent drop after many Britons took advantage of Black Friday to buy their Christmas gifts earlier than usual.
Extraordinary growth: Total sales volumes rose 3.4 percent in January, according to the Office for National Statistics, more than double economists’ forecasts for 1.5 percent growth.
January’s reading was the biggest monthly increase since April 2021, when the easing of Covid-related restrictions allowed non-essential retailers and hospitality establishments to begin trading again.
Volumes returned to November 2023 levels thanks to strong performance in all retail sectors except clothing and footwear stores.
Food establishments, such as supermarkets, were the biggest contributors to growth, recovering from a record decline in December to expand 3.4 percent.
Non-food store volumes also improved significantly, with many department stores benefiting from January sales and hardware stores boosting sales of home goods.
At the same time, auto fuel purchases increased by 5.4 percent, as lower gasoline prices encouraged motorists to fill up more frequently.
Jacqui Baker, retail director at RSM UK, said the result “offers a glimmer of hope for retailers” given that “January is often a lackluster month”.
He added: “After a difficult ‘Golden Quarter’, the big rebound will feel like a victory, particularly as retailers compete for spending while consumers look to chase away the January blues by booking holidays.”
The ONS’s latest monthly retail sales figures come a day after it revealed the UK fell into recession at the end of last year amid continued household cost-of-living pressures and subdued business investment.
Gross domestic product contracted 0.3 percent in the final three months of 2023, following a 0.1 percent decline in the previous quarter.
However, many analysts are optimistic that the British economy and retailers will have a better 2024 due to falling inflation and expectations that the Bank of England will soon cut interest rates.
Real wages are also increasing, including by 1.9 percent during the fourth quarter of 2023 compared to the same period a year earlier.
Jon Boland, managing director of business services provider Clover UK, said: “There are reasons to be positive about the outlook for the UK retail sector.
“Consumer confidence is rising, wages are rising, the cost of borrowing will decline later this year, and inflation is expected to ease further soon; all of these factors could contribute to a recovery in spending over the course of the year.” 2024″.