Retail sales increase 2.6% despite ‘stormy’ January

UK total retail sales increased by 2.6% year-on-year in January, against a growth of 1.2% in January 2024, as consumer sentiment remained resilient despite stormy weather, according to the latest figures from the BRC-KPMG Retail Sales Monitor. This growth was above the three-month average growth of 1.1% and above the 12-month average growth of 0.8%. Food sales increased by 2.8% year on year in January, against a growth of 6.1% in January 2024, which was again above the the-month average growth of 2.3% and below the 12-month average growth of 3%. Meanwhile, non-food sales increased by 2.5% YOY, against a decline of 2.8% in January 2024. Finally, in-store non-food sales were found to have improved by 2.6% YOY in January, against a decline of 2% in January 2024, while online non-food sales increased by 2.2%. 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. 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.” She continued: “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. The 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 and 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 flatlined. 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.”