UK retail sales unexpectedly rise due to January discounts

Retail sales volumes in the UK are estimated to have increased by 0.5% in January 2023, according to data from the Office for National Statistics (ONS).

Price rises and the cost of living crisis had seen retail sales drop 1.2% in December 2022 but post-Christmas discounts and increased fuel sales owing to a fall in prices caused a slight increase overall.

Non-store retailing, predominantly online shopping, sales volumes rose by 2%, in large part due to the aforementioned January discounts. Alongside this, non-food stores sales volumes rose by 0.6%.

Sales volumes fell by 0.9% in the three months to January 2023 when compared with the previous three months. Compared with the same period a year earlier, retail sales volumes fell by 5.7%.

Food store sales volumes fell by 0.5% in January 2023 following a fall of 0.7% in December 2022. ONS put this continued decline down to the cost of living.

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

Jacqui Baker, partner and head of retail at RSM UK, added: “January is typically already a painful month, and whilst it wasn’t quite the hammer blow that many feared, the figures will barely cheer up retailers after a difficult Christmas trading period. While food sales volumes fell 0.5%, non-food retailing and household goods increased 2.0% and 0.8% respectively.

“Consumers have little choice but to be more selective with their spending. While consumers flocked to book holidays on ‘Sunshine Saturday’– the travel industry’s busiest day for bookings in January – this was at the expense of spend on clothing. With the rising cost-of-living set to continue and government support towards energy bills ending in April, it’s likely consumers will retrench even further as households’ disposal income continues to fall.”