Retail sales rose in January despite ongoing consumer uncertainty due to rising inflation, as well as higher energy and transport prices.
Total sales increased 11.9% in January compared with the same month last year, when all non-essential retail was shut, according to the BRC-KPMG Retail Sales Monitor.
Like-for-like sales rose 8.1%, above the three-month average growth of 6% and below the 12-month average growth of 10.9%.
When compared with pre-pandemic figures, retail sales grew 7.5% compared with the same month in 2019.
The British Retail Consortium (BRC) noted that a portion of sales growth is also a reflection of rising prices due to ongoing inflation, rather than increased volumes of consumer purchases.
Non-food sales increased by 11.1% on a total basis and 6.5% on a like-for-like basis. This growth was attributed to an acceleration in demand for furniture, household appliances and footwear.
Total in-store sales of non-food items surged by 67.6% compared with January 2021, while online non-food sales decreased by 24.2% in January.
This marked a change from the growth of 83% recorded last January, when the UK was in lockdown.
Dining out starts to affects food sales
Non-food online penetration fell to 41.5% in January, a decrease from 66.2% in the same month last year. However, this remained 10.3% higher than the rate recorded pre-pandemic in January 2020.
Food sales decreased slightly during the same period, with total sales declining by 0.1% compared with the same month last year. Like-for-like sales dipped by 0.5%, below the 12-month total average growth of 2.4%.
BRC chief executive Helen Dickinson said: “Food sales were more muted than in previous months as people went back to eating out more often. Consumers prioritised home purchases, boosting the sale of household appliances, electronics and homeware.
“In what may be signs of a return to pre-pandemic trends, furniture was the stand-out performer in January after transport delays in the Christmas period began to ease.”
“Retailers and consumers face challenges in the coming months. Retailers face competition from other spending opportunities as the public flood back to restaurants, cafes and live events. Furthermore, rising inflation, driven by higher costs of production, higher energy and transport prices, as well as other looming price hikes this spring will mean consumers will have to tighten their purse strings.”
KPMG UK head of retail Paul Martin added: “We could see a challenging few months ahead if wider macroeconomic conditions start to squeeze household incomes to the point that they start cutting back on retail spending.
“Retailers are facing their own inflationary pressures and will need to take tough decisions on whether and how to pass on the increased costs they have been sitting on for some time to consumers facing their own financial challenges.
“We could easily see the health of the sector start to deteriorate if consumers choose to sit on savings to weather the storm.”
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