The January sales gave retail stores their strongest growth in almost two years in some good news after a dire Christmas, figures show.
Total retail sales across the UK increased by 2.6% year on year in January, albeit against the weak 1.2% uplift of a year earlier, according to the British Retail Consortium (BRC) and KPMG.
Sales of non-food items were up 2.5% year on year in January, against a decline of 2.8% a year earlier, as consumers took advantage of significant discounting on furniture, bedding and accessories to refresh their homes.
Almost all categories saw sales growth, with only toys and baby equipment remaining in decline.BRC chief executive Helen Dickinson said: “Whether this strong performance can hold out for the coming months is yet to be seen.
“Inflationary pressures are rising, compounded by £7 billion of new costs facing retailers, including higher employer national insurance contributions, higher National Living Wage, and a new packaging levy.
“Many businesses will be left with little choice but to increase prices, and cut investment in jobs and stores. Government can mitigate this by ensuring its proposed business rates reforms do not result in any shop paying more in business rates.”
Linda Ellett, UK head of consumer, retail and leisure at KPMG, said: “2025 got off to a welcome start for retailers with much-needed sales growth in January.
“But viewed over a three-month period that included Christmas and Black Friday, non-food sales have flatlined. Overall, the golden quarter failed to shine.“
The trading environment remains tough for retailers, with consumer demand still subdued and household essential bills still high.
“Business costs are also coming under pressure, with rising employment costs only increasing that in the coming months.”
Separate figures from Barclays show spending on essential items returned to growth in January, up 0.1%, after four consecutive months of decline, while supermarket spending also increased for the first time since August 2024, up 1% year on year.However, 86% of consumers are concerned about rising food prices for the third month running, and 49% say they are planning to cut back on non-essential spending, a poll for the bank found.
Despite this, entertainment continued its strong performance into the New Year, with spending rising 8.1% as family-friendly films Mufasa: The Lion King and Sonic the Hedgehog 3 lured in viewers.
Spending on digital content and subscriptions increased 8.3% one in five consumers (19%) said they used their entertainment subscriptions more than usual due to the weather, while growth in takeaway spending reached a year-long high at 5.1%.
Karen Johnson, head of retail at Barclays, said: “January’s figures are a positive signal that non-essential spending should remain strong in 2025. Despite expressing economic uncertainty and a cost-cutting mindset, shoppers are continuing to prioritise the things they love – entertainment, wellness and evenings with family and friends.”
This article was written by PA Consumer Affairs Correspondent and Josie Clarke from Press Association and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.