January retail figures – a chink of light, but too early to declare victory

The Office for National Statistics has reported retail sales figures in Great Britain for January:

  • Retail sales volumes are estimated to have increased by 0.5% in January 2023 following a fall of 1.2% in December.
  • Total non-food stores sales volumes (department, clothing, household and other non-food stores) grew by 0.6% over the month.
  • Online sales volumes rose by 2%, helped by sales promotions.

Charlie Huggins, Head of Equities at Wealth Club commented: “The increase in retail sales figures in January suggests that, while the UK consumer may not be feeling flush with cash, they are still spending. Consumer spending appears to be holding up, at least for now, despite the economic headlines.

“The economic picture is looking a lot less grim than in the Autumn, following the disastrous mini budget.

“Sterling has staged a mini-recovery and mortgage rates have fallen in recent months, despite interest rates going in the other direction. This may have injected some much needed optimism into the UK consumer.

“That said, it is far too early to declare victory. With inflation still eating into consumers’ pockets and many people yet to refinance their mortgages, pressure on retailers could build over the coming months.”