Retail sales surge as consumers tried to beat January blues
The latest ONS retail sales figures show volumes jumped by 1.8% in January, driven by other non-food stores (up 5.3%), non-store retailing (up 3.4%) and households goods (up 3.2%).
Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, said: “Retail sales jumped in January as consumers took advantage of discounts to beat the January blues. As consumers set their new year’s resolutions for the year ahead, health and beauty came under greater focus, with sports supplements retailers seeing a boost.
“The wet and cold weather kept shoppers away from the high street, with many turning to online to find the best deals in the comfort of their own homes. Online sales are also being fuelled by the power of social media, not only finding and recommending the right products for the consumer, but making the purchase of these products incredibly easy in the click of a button.
“After a tough Golden Quarter, the latest uptick in retail sales is exactly what the sector needs, the difficulty now is maintaining solid sales growth. With consumer confidence continuing to improve, there are positive signs ahead, but the key is ensuring better sentiment translates into spending.”
Thomas Pugh, chief economist at RSM UK, added: “The huge 2% m/m increase in retail sales volumes excluding fuel in January suggests that consumers are opening their wallets again as budget uncertainty recedes. It is also a good sign that the economy is bouncing back strongly at the start of this year after a soft end to 2025.
“Admittedly, retail sales are volatile and the ONS has had trouble with seasonal adjustment around the Christmas period, so there may be some pay back next month. But given the seasonal adjustment added less to January than normal and the non-seasonally adjusted data rose by a whopping 5.1% compared to January 2025, this looks like a genuine improvement in sales.
“There are some good reasons to be hopeful for retail sales over the rest of the year. A sharp drop in inflation and two more interest rate cuts should support disposable income growth. The key ingredient remains consumer confidence. Confidence should continue to improve this year as inflation and interest rates come down and the housing market picks up. The big risk is a disruptive leadership contest which resurrects the spectre of tax rises and dampens confidence again.”