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UK retail sales bounce back in January

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UK retail sales bounced back in January as shoppers hit the high streets again, according to figures released on Friday by the Office for National Statistics.
Sales rose 1.9% following a 4% slump December, when Omicron took its toll. This was ahead of analyst expectations for a 1% increase and marked the strongest monthly jump since lockdown ended last Spring. It left sales volumes 3.6% above their pre-pandemic levels.

The data showed that non-food store sales rose 3.4% in January as home improvement sales volumes picked up, with increased sales in household goods and garden centres. Meanwhile, automotive fuel sales were up 4.1% following a 5% decline in December, when home working and lower retail footfall reduced travel.

Darren Morgan, director of economic statistics at the ONS, said: “After a sluggish December where the omicron wave had a significant impact, retail sales rebounded in January with their biggest monthly rise since the shops reopened last spring.

“It was a good month for garden centres, department and household goods stores, with particularly strong trading for furniture and lighting.

“Food sales fell below their pre-pandemic level for the first time, though, as more people returned to eating out and there was also anecdotal evidence suggesting higher demand for takeaways and meal-subscription kits.

“Following a rise in high street footfall towards the end of the month, the proportion of online sales dropped to its lowest level since March 2020, while an increase in road traffic helped push fuel sales up from December.”

Adam Hoyes, assistant economist at Capital Economics, said the solid rise in retail sales volumes in January adds to signs that the Omicron-induced hit to activity was smaller and shorter-lived than previously thought.

“Even so, the cost of living crisis means the outlook for retailers is anything but bright,” he said.

Data released earlier this week by the ONS showed that UK inflation hit 5.5% in January as consumer prices reached their highest level since 1992. This was up from 5.4% in December and compared to forecasts for an unchanged figure.

Earlier this month, the Bank of England said it expected inflation to peak at around 7.25% in April, when a 54% rise in regulated household energy bills will take effect.

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