UK retailers enjoyed a solid rebound last month, boosted by January sales after a disappointing few months to finish last year.
Total retail sales in January 2025 grew 2.6% compared to a year earlier, which was stronger than average growth of 0.4% over the last three months of last year, and above the 12-month average growth of 0.8%, according to the monthly sales monitor survey from the British Retail Consortium and KPMG.
Viewed over a three-month period that included Christmas and Black Friday, non-food sales essentially "flatlined", said KPMG's Linda Ellett, adding that the sector's "golden quarter failed to shine".
Non-food sales increased 2.5% in January, having been in decline over much of last year, with a 1.1% average decline in the last quarter of 2024 and a total decline in non-food of 1.5% over the whole year.
Discounts on furniture, bedding and other home accessories were most popular, the survey found, but with growth across nearly all non-food categories
Food sales swelled 2.8% in January, slower than the growth of 6.1% seen in January 2024 but close to the 12-month average growth of 3%.
Looking at in-store versus online sales, non-food retail in-store was up 2.6% compared to a three-month average decline of 0.7%, while online non-food was up 2.2% versus a three-month average of 1.8%.
Online penetration was down at 35.7%, with shoppers wanting to feel the width in the January sales, compared to a 12-month average of 36.7%.
"The trading environment remains tough for retailers, with consumer demand still subdued and household essential bills still high," said Ellett.
BRC chief executive Helen Dickinson said: "January sales kicked off a solid month for retail with stores delivering their strongest growth in almost two years. While the bouts of stormy weather put a temporary dampener on demand, sales growth held up well throughout the rest of the month."
However, the January survey this year was doubly aided, not only by the comparison coming against what was a weak set of sales from the start of last year, but also by the earlier start of the reporting period, with this set of January data measured from 29 December to 1 February.
The BRC said it is following the Office for National Statistics in using a five-week January this year instead of the typical four weeks, meaning 2025 will be a 53-week year.
"Whether this strong performance can hold out for the coming months is yet to be seen," said Dickinson, pointing to rising inflationary pressures on the economy, plus higher employer national insurance contributions, higher minimum wages and a new packaging levy for retailers.
"Many businesses will be left with little choice but to increase prices, and cut investment in jobs and stores," she added, calling for the government to mitigate this by ensuring proposed business rates reforms do not result in any shop paying more in business rates.
IGD, which collects the data used in the survey, noted that the economic uncertainty is reflected in its January shopper confidence index, which declined by 3 points.
"With unemployment at 4.4% (up 0.4% versus this time last year), shoppers have responded by employing strategies to control their spend," said IGD CEO Sarah Bradbury.
"The notable increase in volume over value sales suggests a shift towards private label products and a change in purchasing categories, as shoppers anticipate further price rises for food and drink."