The Office for National Statistics (ONS) said that retail sales rose by 0.5% in January, partially offsetting a 1.2% drop in December (revised from -1%). Economists had expected sales to fall by 0.3%. Sales volumes were 1.4% below their pre-coronavirus February 2020 levels.
In annual terms, retail sales decreased by 5.1% after falling by 6.1% in December (revised from -5.8%). Consensus estimates suggested a decrease of 5.5% per annum. The UK economy is widely expected to fall into a recession this year and the consumer confidence index from GfK showed households close to their gloomiest since at least 1974.
Over the last three months (through January), retail sales decreased by 0.9% compared to the previous three-month period and by 5.7% year-on-year.
The data also showed that compared to December, non-food stores sales rose by 0.6% after falling by 2.5%. Non-store retailing (predominantly online retailers) sales volumes rose by 2.0%, and automotive fuel sales volumes rose by 1.7%. Meanwhile, food store sales declined by 0.5%, slowing down compared to December (-0.7%). The share of online sales fell to 25.0% from 25.7% in December. Despite this fall, it remains significantly above pre-coronavirus levels (19.8% in February 2020).