Shoppers beat January blues, boosting retail sales

Retail sales volumes are estimated to have risen 1.8 percent in January, a positive jump off the back of a more subdued Christmas period, as heavy discounting persuaded shoppers to open their wallets.

According to the Office for National Statistics (ONS), growth was bolstered by artwork and antiques sales, as well as continued strong sales from online jewellers, which reported "unprecedented levels” of demand.

For the three months to January, sales volumes rose at a more marginal rate of 0.1 percent, compared to the three months prior. Still, volumes were 2.6 percent higher than the three months to January 2025. Over the year to January, sales were up 4.5 percent.

Textile, footwear and clothing performance was less promising. Throughout the month, sales rose just 0.1 percent compared to December, while over the three months they were down 0.7 percent. Online, this sector took a bigger hit, with monthly sales dropping 0.9 percent.

Online sales see sharpest YoY rise since April 2021

This was despite the strong performance seen more broadly online, where overall sales rose 1.8 percent in the three months to January. This reflected an increase of 10.8 percent when compared to the same period last year.

On a monthly basis, online sales rose 1.3 percent on the month prior, and 14.7 percent compared to January 2025, the sharpest year-on-year rise since April 2021.

Analysts cited wet weather as the reason for the boost to online activity, alongside social media, where recent developments, like AI-driven recommendations, have helped ease the buying process.

Looking ahead, while Erin Brookes, European retail and consumer lead at Alvarez & Marsal, said consumer demand was showing signs of resilience, “discount-led growth does not equate to a clean bill of health”.

Brookes continued: “Heavy promotional activity may drive volumes, but it continues to weigh on margins at a time when operating costs remain elevated. Sustaining this momentum will hinge on consumer confidence strengthening and cost pressures on households and retailers starting to ease.

“As 2026 unfolds, businesses will be hoping for clearer signs that falling inflation and improving real household incomes can support a return to full-price and big-ticket spending.”