Retail sales volumes in Great Britain rebounded sharply in January, after plunging in December, but the underlying trend remains weak.
Figures published yesterday by the Office for National Statistics showed retail sales volumes rose 3.4% on a seasonally adjusted basis in January – the sharpest increase since April 2021 - following a 3.3% fall in December.
However, retail sales volumes in the three months to January were down by 0.2% on the August to October period.
Food sales volumes rose 3.4% month-on-month in January. Department store sales volumes jumped by 5.4% last month.
Danni Hewson, head of financial analysis at stockbroker AJ Bell, said: “The traditional ‘golden quarter’ seems to have been reconfigured as those big American discounting moments become embedded in the UK retail landscape. The shift has undoubtedly been helped along by the cost of living crisis, which stretched consumer budgets to the limit and made all of us hyper-aware of where every single penny was being spent.
“Why buy gifts in December when you could have purchased them at a discount on Black Friday or instead leave them languishing in an online shopping basket whilst you wait expectantly for the January sales?”
She added: “Conversations about when the best value could be achieved were likely repeated in households up and down the country and many older kids would have been delighted to find cash in their stockings that they could then spend when prices fell. Essentials are still being prioritised - they have to be when things like energy costs are still heading in the wrong direction, at least for now.”
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Martin Beck, chief economic advisor to the EY ITEM Club think-tank, said: “January's rise returned sales to their level of last November but meant volumes were still down 0.2% on a three-month-on-three-month basis, albeit this was the smallest fall on this measure since August 2023.”
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Ms Hewson said: “Shops have had to discount hard after a year of uncomfortable inflationary price hikes. People are still paying more for less and they’re growing ever more weary of it. With the country officially in recession confidence is likely to be knocked further, even as people’s pay packets finally feel a little thicker.”
Sophie Lund-Yates, lead equity analyst at stockbroker Hargreaves Lansdown, said yesterday of the rise in retail sales in January: “This is a stark contrast to a very tough December for the retailers, and could spell that the economy is primed to slowly emerge from hibernation.
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“These green shoots are encouraging, but we’re not totally out of the woods yet. Clothing is still a lag, suggesting consumers are still wary about spending on non-essentials. The increase in supermarkets is welcome news though - looser buying behaviour in this area indicates that the very worst of penny-pinching is probably over.”
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