Retail sales bounce back in January after weak end to 2019

retail sales growth

Retail sales improved in January, increasing by 0.9% on the previous month, official figures show.

The Office for National Statistics (ONS) said the amount of goods sold in Great Britain rose by 0.9%, after falls in the previous two months.

It was the largest monthly rise since March, and a stronger performance than was expected by economists.

Despite the rebound seen last month, sales for the three-months to end-January fell.

Rhian Murphy, head of retail sales at the ONS, pointed out that in the three months to January, the amount of goods bought fell by 0.8%. She said there were “declines across all sectors” during the quarter.

But Aled Patchett, head of retail and consumer goods at Lloyds Bank Commercial Banking, said the economy appears to be “on surer footing”.

He added: “While the ‘Boris-bounce’ appears to have boosted consumer confidence and improved the mood among retailers, many are continuing to forecast with caution in mind, having endured a difficult Christmas – something that was reflected in the smaller-than-expected discounts in January.”

Fuel saw a large fall of 5.7% in the amount bought in January when compared with December 2019, coinciding with a price increase of 2.3p. This was followed by clothing shops with a drop of 3.9%.

Andrew Carlisle, managing director at Accenture, said that the retail sector’s struggles “have yet to show signs of abating”, adding: “While there was modest sales growth in January, it is not enough for retailers to get excited about.”

Compared with a year ago, internet sales were also 4.9% higher in January.

‘Tough trading’

Previous research by the British Retail Consortium (BRC) suggested that 2019 may have been the worst year in 25 years for retailers. It said that total sales fell by 0.1%, marking the first annual sales decline since 1995.

However, the trade body’s figures do not include the entire retail market. Its survey excludes some fast-growing online retailers, including Amazon, for example.

UK High Streets continue to face tough trading conditions, with big chains such as Mothercare and Thomas Cook going bust in recent months.

The decline of the High Street has been attributed to a range of causes. High business rates, national living wage rises, Brexit and weak consumer confidence are some challenges facing retailers, as well as the rise of online retail.