British retail sales rebound to post highest monthly increase since April

British retail sales have rebounded more than expected in January to post their largest monthly increase since the reopening of non-essential stores last April, boosted by demand for fuel and home improvement items.

The volume of retail sales grew 1.9 per cent between December and January, after a sharp contraction the previous month, data from the Office for National Statistics on Friday showed.

That was almost double the 1 per cent expansion forecast by economists polled by Reuters. The figures were buoyed by declining Covid-19 infections and the easing of restrictions.

Darren Morgan, ONS director of economic statistics, said that “after a sluggish December where the Omicron wave had a significant impact, retail sales rebounded in January with their biggest monthly rise since the shops reopened last spring”.

He added that it was a good month for garden centres, department and household goods stores, with particularly strong demand for furniture and lighting.

Food sales fell below their pre-pandemic level for the first time, however, as more people returned to eating out. “There was also anecdotal evidence suggesting higher demand for takeaways and meal-subscription kits,” said Morgan.

Total sales volumes in January were 9.1 per cent higher than the same month a year ago, and 3.6 per cent above pre-pandemic levels.

Non-food stores sales volumes rose 3.4 per cent in January as demand for home improvement items picked up.

Automotive fuel sales volumes rose 4 per cent in January following a fall of 5 per cent in December when increased homeworking and lower retail footfall reduced travel.

The proportion of retail purchases made online fell to 25 per cent in January, its lowest since March 2020, but higher than the 20 per cent recorded before the pandemic in February 2020.

Paul Martin, UK head of retail at KPMG, said the retail sector started the year “in relatively good health” and not facing further Covid restrictions on the ability to trade.

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