UK Retail Sales Rise 1.7% in January, Food Demand Drives Growth

UK retail sales rose by 1.7% in January, marking the largest increase since May 2024 and surpassing expectations of a 0.5% gain, according to the Office for National Statistics. This surge was primarily driven by a robust demand for food, as households increasingly opted to eat at home, particularly in supermarkets and specialist food stores. However, the non-food sector, including clothing and household goods, experienced a decline of 1.3%, reflecting ongoing consumer confidence issues. Despite the positive monthly figures, retail sales remain 1.3% lower than pre-pandemic levels, indicating a cautious outlook among consumers. Analysts noted that while there was a rebound in retail activity, the overall economic environment remains challenging due to rising inflation and potential job cuts in the retail sector. Consequently, major retailers are bracing for a tougher year ahead as economic uncertainties persist.