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January Discounts See Modest Retail Uptick

MNI (London)

UK JAN RETAIL SALES +0.5% M/M (FCST -0.3%); DEC -1.2% M/M

UK JAN RETAIL SALES -5.1% Y/Y (FCST -5.6%); DEC -6.1% Y/Y

  • UK retail sales improved slightly in January, expanding by 0.5% m/m (0.4% ex fuel), largely due to non-food sales which rose +0.6% m/m, boosted by sales promotions. This follows -1.2% m/m (-1.4% m/m ex fuel) contractions in December.
  • Lower fuel prices boosted sales at the gas pump in January, whilst food sales declined again, down -0.5% m/m as customers reduce spending due to elevated grocery costs.
  • In aggregate, sales volumes remained 1.4% below pre-covid Feb 2020 levels.
  • Despite downwards revisions to December data, the ONS Spokesperson confirmed that the contribution to Q4 GDP remained unchanged at -0.04%.
  • Low consumer confidence, and upcoming rises in household bills and mortgage rates continues to hamper spending appetite. UK retail has now recorded ten consecutive Y/Y contractions. The last negative streak this long was in 2008/09.
  • Lacklustre spending outlooks remain a concern for the BOE but in line with projections.

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