Food shopping pushes January retail sales up 1.7%

Retailers had a surprisingly good month in January, as shoppers’ appetite for discount spending prompted the first monthly rise in sales volumes since last summer.

Sales volumes jumped 1.7%, according to official figures, bursting higher than analyst predictions of just 0.3% growth.

The figures mark a bounce back for the sector, which saw declining trade in the key December month and for the final third of 2024 before that.

Pandemic

The rise was driven by a sharp uptick in food sales, which jumped by the highest amount since the start of Covid-19 lockdowns in March 2020.

The Office for National Statistics said food sales surged 5.6%, as supermarkets plus specialists like butchers and bakers reported strong trading, driven by households eating more meals at home.

The figures could signal a boost for Labour, as more spending at retailers tends to help economic growth, which the Government has said is its top priority.

But trading was slower at clothes sellers and other non-food retailers, as sales fell by 1.3% during the month.

ONS senior statistician Hannah Finselbach said: “Retail sales rebounded strongly in January following four months of consecutive falls.

“However, clothing shops and household goods stores had less of a successful month with retailers reporting lacklustre sales due to weak consumer confidence.

“Looking at the broader picture, retail sales have decreased across the three-month period and are below pre-pandemic levels.”

Gloom

But Susannah Streeter, an analyst at Hargreaves Lansdown, added there is “more spring in the step” of the sector.

“Shoppers appeared to defy the gloom and bought more food to cheer up the long winter nights,” she added.

Some experts were less positive about the figures, with Alice Cowley, of consultancy Accenture, saying it is still “not the splash retailers will have wished for”.

She said: “Consumers have kept a tight grip on their purse strings post-Christmas.”

“This past three-month period has fallen short of expectations for many, as shoppers increasingly prioritised essentials only in non-food categories and turned to own label food products, weakening margins.”