UK retail sales saw a 2.6% year-on-year increase in January, surpassing the previous year's 1.2% growth. This figure exceeded both the three-month average of 1.1% and the 12-month average of 0.8%. Food sales rose by 2.8% compared to January 2024's 6.1% growth, performing above the three-month average of 2.3% but below the annual average of 3%. Meanwhile, non-food sales climbed by 2.5%, recovering from a 2.8% decline in the same period last year. This marked an improvement over both the three-month average growth of 0.2% and the 12-month average decline of 1.1%.
Photo: Dreamstime.
In-store non-food sales grew by 2.6% year on year, contrasting with a 2% decline in January 2024, and outpacing the three-month average decline of 0.7% and the 12-month average decline of 1.7%. Online non-food sales also rebounded, rising by 2.2% after a 4.2% drop last January. This was above the three-month average of 1.8% and the 12-month average of 0.1%. However, the online penetration rate for non-food items dipped slightly to 35.7% from 35.8% in January 2024, falling below the 12-month average of 36.7%.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: 'January sales kicked off a solid month for retail with stores delivering their strongest growth in almost two years, albeit on a weak comparable. Consumers headed to the shops to refresh their homes for the year ahead, taking advantage of big discounts on furniture, bedding and other home accessories. With growth across nearly all categories, only toys and baby equipment remained in decline. While the bouts of stormy weather put a temporary dampener on demand, sales growth held up well throughout the rest of the month. This was also helped by the earlier start of the reporting period, adding a few more post-Christmas shopping days into the mix. Whether this strong performance can hold out for the coming months is yet to be seen. Inflationary pressures are rising, compounded by £7bn of new costs facing retailers, including higher employer national insurance contributions, higher National Living Wage, and a new packaging levy. Many businesses will be left with little choice but to increase prices, and cut investment in jobs and stores. Government can mitigate this by ensuring its proposed business rates reforms do not result in any shop paying more in business rates.'
Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, said: '2025 got off to a welcome start for retailers with much needed sales growth in January. But viewed over a three-month period that included Christmas and Black Friday, non-food sales have flat lined. Overall, the golden quarter failed to shine. The trading environment remains tough for retailers, with consumer demand still subdued and household essential bills still high. Business costs are also coming under pressure, with rising employment costs only increasing that in the coming months. Boardroom focus on costs and competitiveness is sharpening. Pricing adjustments, product launches, store closures, job losses, and increased automation and AI are all set to reshape the retail landscape in 2025.'
More information:
British Retail Consortium
[email protected]
www.brc.org.uk