News

UK retail sales growth at highest in 2 years

UK retail sales rose following a disappointing December, thanks to a boost in demand for clothing and technology.

The 2.3% jump in the volume of sales, the highest recorded in nearly two years, was almost three times the pace of growth forecast by economists. The Office for National Statistics (ONS) said that growth was helped by post-Christmas pricing cuts [1].

The growth was focused in the non-food sector, which grew by 3.6%, with pharmacies, sporting goods and florists recording growth of 8.1%. Melanie Richard, Head of Retail Sales Statistics at ONS, said: “While all store types showed growth in January, the strongest performance came from the non-food sector. Department stores recorded good growth as retailers cut prices to clear stock and, along with household goods stores, are experiencing their longest period of sustained growth since before the economic downturn” [2].

However, others were less optimistic. Samuel Tombs, Chief UK Economist at Pantheon Macroeconomics, said: “Looking ahead, it’s hard to see how even UK consumers will be able to keep increasing spending at the strong rates seen over recent months” [2].

Keith Richardson at Lloyds Bank said: “The long overdue arrival of winter may have brought a new-year cheer to retailers”, although he warned about the possibility of a recurring pattern, where savvy shoppers who have money to spend on bargains are reluctant to buy at full price. [3].

Shoppers appear to be doing more of their buying online, with the value of online sales increasing by 10.4% in January, compared with the previous year [4].

In the last three months, total sales have risen by 1.4%, a 26th consecutive rise, showing goods within the economy are ever increasing in demand [1].

 

[1] Bloomberg. ‘UK retail sales surged most in more than two years in January’. bloomberg.com

[2] The Guardian. ‘Post-Christmas boom lifts UK high street sales’. theguardian.com

[3] Financial Times. ‘UK retail sales grow strongly in January’. ft.com

[4] Sky News. ‘Retail sales jump is highest in over two years’. news.sky.com