British High Street Sales Surge as Food Shopping Drives January Growth

A significant uptick in retail sales volumes marked the start of 2025, with food shopping and post-Christmas discounts propelling a 1.7 per cent increase in January. The rise, which exceeded analysts’ expectations of 0.5 per cent, represents a notable recovery following four consecutive months of decline.

The Office for National Statistics reported robust performance across supermarkets and specialist food retailers, with transactions reaching their highest levels since March 2020. Traditional food merchants, including butchers and bakers, experienced particularly strong trading as households demonstrated a growing preference for home-cooked meals.

Despite the overall positive trajectory, the retail landscape revealed a mixed picture. Non-food retailers, particularly those in the clothing sector, witnessed a 1.3 per cent decline in sales, reflecting persistent weakness in consumer confidence. Online retail also experienced a downturn, with digital transactions falling to 25.7 per cent of total retail spending, down from 26.9 per cent.

The Bank of England’s recent decision to reduce interest rates to 4.5 per cent marks the third cut in six months, with analysts forecasting further reductions to potentially reach 3.75 per cent by year-end. These monetary policy adjustments aim to stimulate consumer spending and economic growth, which has remained largely stagnant since March 2024.

While the January figures present an encouraging start to the year, retail sales volumes continue to lag 1.3 per cent below pre-pandemic levels. The economic outlook remains cautious, with the Bank of England recently halving its GDP growth forecast for 2025 to 0.75 per cent, highlighting ongoing challenges in the retail sector despite the recent sales boost.