The official UK retail sales figures for January are out and the Office for National Statistics has announced a 1.7% month-on-month volume increase and a 1% year-on-year rise, welcome news after recent falls.

But it was driven by food store sales volumes growing strongly last month following falls in recent months and fashion was the underperformer, trailing all other categories.

Not only that, overall retail sales volumes were down by 1.3%, compared with their pre-pandemic level in February 2020 so it’s certainly too soon to celebrate.

The conclusion is that retail sales are headed in the right direction but sales remain sluggish for non-foods, which fell month-on-month in January.

In fact, non-food stores – the total of department, clothing, household and other non-food stores – fell 1.3% over the month. Clothing retailers and household goods stores suggested the fall was because of reduced consumer confidence with clothing stores down almost 2.4%while department stores were broadly flat.

That said, non-store retailers’ sales volumes rose 2.4% on the month, partially rebounding from a 3.4% fall in December 2024. Retailers in this sector reported post-Christmas sales remaining strong.

Overall though, the amount spent online (that is, online spending values), fell by 1.7% over the month to January 2025. It fell by 4.8% when comparing the three months to January 2025 with the three months to October 2024. However, sales values rose by 0.8% when comparing January 2025 with January 2024.

Analyst views

So what was the reaction to this from the industry and analysts?

Jacqueline Windsor, Head of Retail at PwC UK, hailed the total sales increase last month and added that compared with last January, and excluding petrol, the UK saw “a 2.6% increase in pounds spent at retailers, with year-on-year growth across almost all categories of retail”.

But the sting in the tail was that issue of fashion being the worst-performing category of all. She said fashion had seen “a stronger end of 2024… helped by widespread discounting” but it seems that the January clearance sale discounts didn’t help the sector during the month.

Greg Zakowicz, senior e-commerce expert at Omnisend, said that “the [overall][ January retail sales data is a welcome curveball given the headwinds facing the UK high street” and highlighted how retailers are marketing their wares very heavily.

“Our data shows that UK retailers have sent out 14% more marketing emails in the first seven weeks of 2025 compared to the same period last year,” he said. “This could reflect the fact that consumers are feeling the pinch and are proving harder to convert than in the past.

“That’s understandable given that inflation is once again on the rise, interest rates are far higher than what they were for well over a decade and many retailers, due to the impending National Insurance hikes, are having to increase prices.

“A stagnant economy coupled with fiscal pressures from the Budget are also potentially creating fears around job certainty, which again makes people less likely to spend, which hurts retailers, both high street and online.”

Meanwhile Deann Evans, MD EMEA of Shopify, was upbeat, highlighting the categories that are on a roll. Evans said the return to positive sales growth in January “has been driven by consumers acting on their New Year’s resolutions and starting 2025 with new and/or revitalised hobbies. According to our product data, gardening items saw a significant increase in January.

“Also evident in our product data was a continued growth in sales around darts items, for the second month in a row – which is indicative of the ‘Luke Littler Effect’ in full force. In January, dartboards sales rose by 6%, darts by 32.5% and dart flights by 43%. We previously saw a similar positive commerce effect around Taylor Swift and Oasis tickets, illustrating just how powerful sport and wider cultural moments can be. 

“Looking ahead, it is crucial that merchants who offer such products are ready to capitalise on the opportunity by having solutions in place that will help them serve their customers quickly and effectively.”

Worrying trend

And Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club, added: “Retail sales volumes came in much better than expected in January, but this was largely due to a significant recovery in food sales. Non-food stores saw sales decline by 1.3%, with clothing sales especially weak – hardly a sign that consumers are feeling flush.

“The large increase in food sales is clearly a positive for supermarkets, but it may be a worrying sign for other parts of the economy. More people eating at home is especially bad news for restaurants, pubs and bars. These sectors are in dire need of footfall, with their costs set to rise significantly in April following the Autumn Budget.

“The decline in clothing sales is also a worry. Clothing is one of the first things consumers cut back on when they are feeling the pinch.”