It seems that the cost of living crisis isn’t holding us back from hitting the shops.
The latest official figures show retail sales staged a recovery in January, despite rising prices and the ongoing threat from the Covid variant Omicron.
There was a 1.9% rise in the volume of sales on the High Street and online compared to January last year.
The Office for National Statistics (ONS) also reported that the improvement in retail sales was the best monthly increase since the reopening of retail stores last Spring.
Department stores, garden centres and non-food stores reported a 3.4% increase in sales.
Helen Dickinson, chief executive of the British Retail Consortium, commented that retail sales held up well in January despite rising price inflation and declining consumer confidence, saying:
“Sales of non-food items, including clothing, furniture and household goods all grew by high double digits.
“Meanwhile, food sales dropped — though this is compared to January 2021, when most of the country was in lockdown and households were unable to eat out.”
These retail sales figures follow hot on the heels of the latest official inflation data, showing the Consumer Prices Index (CPI) measure of inflation up 5.5% for the twelve months to January.
Despite the threat of rising prices, sales volumes in January were 3.6% higher than the pre-pandemic levels recorded for February 2020.
Strong retail sales figures could help convince the Bank of England that another interest rate rise is needed at their next Monetary Policy Committee meeting in March.
Kevin Brown, Savings Specialist at Scottish Friendly, said:
“The rebound in sales in January suggests consumers still do have some pent-up demand to spend. The sharp spike in sales at furniture, lighting and electrical goods stores shows that shoppers were happy to be back on the high street last month.
“Households also spent less in food stores in January as the appetite to eat out increased. The overall 1.9% jump in sales is the biggest monthly rise since the lockdown was lifted last Spring and it helped to recover nearly half of the 4% drop seen in December.
“The recovery will provide fresh hope for retailers who suffered a difficult Christmas period, but with inflation at a 30-year high and living costs set to carry on rising, the spike in consumer spending could be short-lived.
“Household incomes are being tightly squeezed and the higher inflation rises the more likely it is that retail sales will suffer. For families without large disposable incomes or plenty of excess savings to draw on, their focus for the foreseeable future will be on minimising their discretionary spending to try and ride out the rising cost of living crisis.”