- Retail sales rebounded by 3.4% in January
- But December’s slump was slightly bigger than had originally been reported and over three months volumes were down 0.2% compared to previous quarter
- The weekly food shop was the biggest driver of the rebound
Danni Hewson, head of financial analysis at AJ Bell, comments on the latest retail sales figures:
“The traditional ‘golden quarter’ seems to have been reconfigured as those big American discounting moments become embedded in the UK retail landscape. The shift has undoubtedly been helped along by the cost-of-living crisis which stretched consumer budgets to the limit and made all of us hyper aware of where every single penny was being spent.
“Why buy gifts in December when you could have purchased them at a discount on Black Friday or instead leave them languishing in an online shopping basket whilst you wait expectantly for the January sales?
“Conversations about when the best value could be achieved were likely repeated in households up and down the country and many older kids would have been delighted to find cash in their stockings that they could then spend when prices fell. Essentials are still being prioritised – they have to be when things like energy costs are still heading in the wrong direction, at least for now.
“Earnings updates from pub chains like Mitchells & Butlers showed that many families chose to enjoy their festive feast without the headache of having to cook it but once the twinkly lights and tinsel were put back in the shed, empty kitchen cupboards had to be restocked.
“Supermarkets, with their economies of scale, enjoyed the biggest boost in January, with consumers hunting out value wherever they can find it. Department stores and sporting goods retailers also got a bump, however the joy at tills ringing was likely to have been offset by the number that was displayed on screen.
“Shops have had to discount hard after a year of uncomfortable inflationary price hikes. People are still paying more for less and they’re growing ever more weary of it. With the country officially in recession confidence is likely to be knocked further, even as people’s pay packets finally feel a little thicker.”
