Commenting on the Office of National Statistics retail sales index for January 2025, Jacqueline Windsor, Head of Retail at PwC UK:
"Following a weaker-than-expected December, retail sales recovered strongly in January with headline retail sales volumes rising by 1.7%. Compared with last January, and excluding petrol, this represents a 2.6% increase in pounds spent at retailers, with year-on-year growth across almost all categories of retail."
"Grocery sales performed particularly well, increasing by 2.9% year on year, albeit partly reflecting higher prices as supermarkets began to pass through inflation to shoppers. Nevertheless, grocery sales volumes still increased by 0.4%."
"Conversely, following a stronger end of 2024 for fashion, helped by widespread discounting, clothing retailers saw sales fall by 2.4%, making this the worst performing category."
"Despite the colder weather, the high street benefited from the fifth sunniest January on record, with footfall recovering. As a result, penetration of online retailers fell from 26.9% in December to 25.7% in January, making this the weakest month for online retailers since the disruption caused by postal strikes in December 2022."
"While January has proven to be a better-than-expected start to the new year, retailers will be hoping that this momentum continues, despite weakening consumer sentiment. The wider economic climate will become increasingly challenging for the retail sector, as input cost inflation rebounds and higher labour costs and business rates increases hit in April."
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