Surprise rise in UK retail sales volumes reported

Sales were 0.5% higher in January, compared with December, according to official figures

People walk along Oxford Street in London. Getty
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Retail sales volumes in the UK rose by 0.5 per cent in January, compared to a fall of 1.4 per cent in December, according to figures from the Office for National Statistics.

A poll of economists by Reuters had pointed to a 0.3 per cent fall in sales last month compared with December.

Driving the numbers higher was a 1.7 per cent rise in the sales volumes of petrol, following a rise of 0.3 per cent in December 2022 as fuel prices continued to fall.

However, food store sales volumes continued to struggle. They fell by 0.5 per cent in January, following a fall of 0.7 per cent in December.

A woman shops at Sainsbury's supermarket in London on Wednesday. The UK's inflation rate fell for the third month in a row in January 2023, however, inflation on food products is at a 45-year high with. EPA

Volumes and values

Inflation played a major role in the numbers. Retail sales by volumes fell by 5.1 per cent in January when compared to the same month last year, while the value of retail sales rose by 4.1 per cent last month when compared to January 2022.

"After December's steep fall, retail sales picked up slightly in January, although the general trend remains one of decline," said Darren Morgan, director of economic statistics at the ONS.

"In the latest month, as prices continue to fall at the pumps, fuel sales have risen."

"Meanwhile, discounting helped boost sales for online retailers as well as jewellers, cosmetic stores and carpet and furnishing shops.

"However, after four months of consecutive growth, clothing store sales fell back sharply."

Analysts said the unexpected jump in January retail sales volumes was simply a blip.

“This isn’t a turnaround in the fortunes of the retailers: It’s highly likely that this is just a bump in the slide that started back in summer 2021," said Sarah Coles, head of personal finance at Hargreaves Lansdown.

“When your money isn’t stretching as far as it did, it makes sense to wait for the sales you know are coming," said Danni Hewson, head of financial analysis at AJ Bell.

"Many families decided to cut back on their Christmas gift giving and there will also be plenty of people who chose to give cash with the expectation that their children or other family members could treat themselves to the things they really wanted at a price that looked much nicer."

“With celebrations and family gatherings over for another year people are making smart choices, trading down to a cheaper supermarket, hunting out own labels and putting fewer items in their baskets."

“The glad rags have been put away and there’s no need to add to wardrobes when the weather’s grey and dreary and you’ve nowhere to go and be seen."

“Retailers will view January’s figures with mixed emotions. The fact people have been spending in what’s often a difficult month will be welcome, but sales do little to bolster margins," she added.

Updated: February 17, 2023, 9:40 AM
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