Retail sales unexpectedly rebounded in January following a fall in December, but the general outlook remains gloomy for the sector, according to the latest data from the Office for National Statistics (ONS).
Retail sales are estimated to have increased by 0.5% in January 2023, off the back of a 1.2% fall in December 2022, which was revised by the ONS from a fall of 1.0%. Sales volumes remain 1.4% below their pre-Covid February 2020 levels and January’s rebound was attributed to heavy sales promotions.
Non-store retailing – predominantly online retailers – sales volumes rose by 2.0%, with feedback suggesting this was supported by January sales promotions. Non-food store sales volumes increased by 0.6% in January following a 2.5% fall in December. Non-food store sales remain 2.9% below their pre-Covid February 2020 levels.
Food store sales volumes fell by 0.5% in January after a fall of 0.7% in December. The ONS said customers were buying less because of the increased cost of living and food prices.
The proportion of online retail sales online fell to 25.0% in January 2023 from 25.7% in December 2022, but despite the fall it remains significantly above pre-Covid levels (19.8% in February 2020).
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.”
Helen Dickinson, chief executive of the British Retail Consortium, added: “Widespread January sales helped sales growth remain positive as the industry entered the New Year. Despite this, the rise in consumer spending could not keep up with the double-digit inflation rates, with another fall in retail volumes. Larger purchases were hit harder as consumers tightened their purse strings or traded down to value brands. Meanwhile, clothing and footwear saw stronger growth last month.”
“With consumer confidence falling slightly, and high costs throughout the supply chain preventing prices from falling, it is a bumpy road for households. However, retailers are taking steps to cut costs and limit price rises where they can, to help their hard-pressed customers.”
