Surprise jump in UK retail sales in January but general trend 'one of decline'
The Office for National Statistics (ONS) said retailer sales volumes nudged up 0.5 per cent in January, following a fall of 1.2 per cent in December. The rise was beyond the expectations of analysts, who had predicted a 0.2 per cent decline for the month. Retail sales volumes are, nevertheless, still 1.4 per cent lower than pre-pandemic levels from February 2022.
ONS director of economic statistics Darren Morgan said: “After December's steep fall, retail sales picked up slightly in January, although the general trend remains one of decline. 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.”
Charlie Huggins, head of equities at Wealth Club, said: “The increase in retail sales figures in January suggests that, while the UK consumer may not be feeling flush with cash, they are still spending. Consumer spending appears to be holding up, at least for now, despite the economic headlines. That said, it is far too early to declare victory. With inflation still eating into consumers’ pockets and many people yet to refinance their mortgages, pressure on retailers could build over the coming months.”
Lisa Hooker, industry leader for consumer markets at business services and accountancy giant PwC, noted: “For retailers, surviving the next six months will be critical to their success in the year ahead. However, there will be light at the end of the tunnel once inflation eases as predicted in the second half of the year, and income growth turns positive in real terms.”
Releasing their latest sales monitor earlier this week, the Scottish Retail Consortium (SRC) and KPMG said total sales north of the Border grew by 1 per cent in January, once prices had been adjusted for inflation. Industry leaders warned that any retail recovery was “deeply fragile”.
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