Retail sales in the United Kingdom grew 1.9 percent in January compared with December and 5.3 per cent on an annual basis, according to data released by the Office for National Statistics (ONS) on Friday.
The month-on-month growth of 1.9 per cent in January followed a decline in retail sales volume of 1.4 per cent in December, ONS said.
The underlying picture may therefore be better considered by noting that in the two months taken together, sales increased by 0.5 per cent, the report says.
The data presents a picture of positive, but unspectacular, underlying growth, according to Vicky Redwood, senior UK economist at Capital Economics. The analyst said the January figures cannot be taken as evidence for any solid consumer recovery.
What’s more, other evidence (e.g. John Lewis weekly sales figures, the BRC survey) suggests that after a strong start to January, spending growth has slowed to pretty sluggish rates and has yet to recover, Redwood said in a note.
While food store sales decreased by 2.3 per cent, predominantly non-food store sales rose by 9.5 per cent with rises across all sectors in this area, ONS said. Other stores saw the largest rise at 15.8 per cent, driven by computers and telecommunications equipment and sporting goods and toys, followed by non-specialized stores at 10.7 per cent.
Non-store retailing increased by 22.1 per cent and automotive fuel increased by 6.0 percent.
Indeed, with real household incomes set to fall significantly this year, we find it hard to see consumer spending doing at all well, Redwood said.