Retail sales in the UK increased by 2.6% year-on-year in January 2025 compared to growth of 1.2% in the same period last year, according to the latest BRC-KPMG Retail Sales Monitor data.
Moreover, this figure was above the three-month average growth of 1.1% and above the 12-month average growth of 0.8%.
Food sales increased by 2.8% year on year in January, against a growth of 6.1% in January 2024, data showed.
This was more than the three-month average growth of 2.3% and below the 12-month average growth of 3%.
Commenting on the performance of the food and drinks sector, Sarah Bradbury, CEO of IGD, stated, “The current climate of economic uncertainty is reflected in IGD’s January shopper confidence index, which has declined by 3 points. With unemployment at 4.4% (up 0.4% vs this time last year), shoppers have responded by employing strategies to control their spend.
”The notable increase in volume over value sales suggests a shift towards private label products and a change in purchasing categories, as shoppers anticipate further price rises for food and drink.”
Non-Food Categories
Sales in the non-food category grew 2.5% year on year in January, compared to a decline of 2.8% in January 2024.
It remained above the three-month average growth of 0.2% and above the 12-month average decline of 1.1%.
Helen Dickinson OBE, chief executive of the British Retail Consortium, stated, “January sales kicked off a solid month for retail with stores delivering their strongest growth in almost two years, albeit on a weak comparable. Consumers headed to the shops to refresh their homes for the year ahead, taking advantage of big discounts on furniture, bedding and other home accessories.”
January also witnessed in-store non-food sales increasing by 2.6% year on year. This contrasts with a decline of 2% in the same period last year.
The online channel saw non-food sales up 2.2% in January 2025, compared to a decline of 4.2% in the year-ago period.
Tough Trading Environment
Dickinson stated, “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.
“Boardroom focus on costs and competitiveness is sharpening. Pricing adjustments, product launches, store closures, job losses, and increased automation and AI are all set to reshape the retail landscape in 2025.”
Linda Ellett, UK head of consumer, retail and leisure at KPMG, stated, “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.”
