In January 2024, the UK retail sector witnessed a notable recovery, as sales volumes increased by 3.4% following a historic decline of 3.3% in December 2023, as reported by the Office for National Statistics (ONS). This marked the largest monthly rise since April 2021, effectively restoring sales volumes to the levels observed in November 2023. The recovery was predominantly led by increased sales in food stores, notably supermarkets, contributing the most to the uplift. Despite a marginal 0.2% decrease in sales volumes over the three months to January compared to the previous three months, this period registered the smallest decline since August 2023.
In terms of sales values, consumers spent 3.9% more in January 2024 than in the previous month, indicating that the amount spent outpaced the rise in sales volumes. This upward trend in January returned sales volumes to their November 2023 standings, following December’s substantial fall, which was the largest monthly decrease since the onset of COVID-19 restrictions in January 2021. Year-on-year analysis shows sales volumes in January 2024 were 0.7% higher than in January 2023, yet they remained 1.3% below the pre-pandemic levels of February 2020.
January ONS Figures
The revival was observed across all subsectors except clothing, with notable increases in department stores and non-food stores, including sports equipment stores, which reported positive impacts from January sales. Department stores and other non-food retailers saw sales volumes increase by 5.4% and 6.2%, respectively. Automotive fuel sales also rose by 5.4% over the month, potentially influenced by declining fuel prices.
However, online retailing witnessed a downturn, with online spending values falling by 4.1% over the month to January 2024, though there was a 1.0% increase over the year. The proportion of sales made online decreased from 26.8% in December 2023 to 24.8% in January 2024, attributed partly to the sample update process undertaken to ensure the relevance of the sample, which may have more significantly impacted online sales figures.
Deloitte’s commentary on the latest figures highlights the unexpected rise in January’s retail sales despite challenges such as prolonged wait times for payday and persistent high food prices. Oliver Vernon-Harcourt, head of retail at Deloitte, said:
“January’s retail sales rose unexpectedly despite consumers facing a longer wait for payday and ongoing high food prices.
“The retail industry is entering a transitionary period as inflation eases and consumer confidence shows early signs of improvement.
“However, times continue to be tough for the retail sector. Leaders’ focus will remain on sales growth while managing higher costs and changing demand. To do this, retailers will need to ensure they offer the right balance of quality and value for consumers to spend their hard-earned money.
“For those that continue to invest in both their people and customer engagement, better times are ahead.”
