Art and Antiques Propel UK Retail Sales to Largest Monthly Increase Since 2024
Retail sales in Great Britain experienced a significant surge in January, climbing 1.8% to mark the most substantial monthly rise since May 2024, according to the Office for National Statistics (ONS). This increase far exceeded economists' forecasts of a modest 0.2% gain, driven notably by robust sales in artwork and antiques, alongside sustained strong performance from online jewellers.
Key Drivers Behind the Sales Boost
The ONS reported that the January uptick was fueled by several factors. Art and antiques sales saw a notable spike, as shoppers capitalized on post-Christmas discounts and sought unique items. Concurrently, online jewellery retailers continued to thrive, contributing to the overall growth. On an annual basis, retail sales volumes rose by 4.5%, again surpassing expectations and indicating a positive trend in consumer spending.
Grant Fitzner, chief economist at the ONS, highlighted that business activity "continued to pick up in the new year following a weak November" for retailers. He noted that motor fuel sales increased slightly, while categories such as artworks, technology retailers, and furniture stores performed exceptionally well during this period.
Economic Context and Consumer Confidence
Economists view these figures as an early indicator of recovering consumer confidence after a challenging end to 2025. Earlier in the week, data revealed that inflation dropped sharply to 3% in January from 3.4% in December, raising expectations that the Bank of England may soon implement interest rate cuts. Such measures could further bolster disposable incomes and stimulate spending.
Thomas Pugh, chief economist at RSM UK, emphasized: "A sharp drop in inflation and two more interest rate cuts should support disposable income growth. The key ingredient remains consumer confidence." This sentiment is echoed by Rob Wood, chief UK economist at Pantheon Macroeconomics, who stated that the data provides "further evidence that economic activity is picking up smartly in the new year as budget uncertainty fades."
Sector-Specific Performance and Online Sales Surge
In addition to art and antiques, other retail sectors showed resilience. In-store household goods sales rebounded after a weak December, clothing sales edged up slightly, and food sales volumes increased by 1.2% month-on-month, marking the strongest growth since last July. However, over the three months to January, overall sales volumes only rose by 0.1% compared to the previous quarter, with fuel, furniture, and technology among the top-selling categories.
Unusually rainy weather in January contributed to a boost in online sales, as consumers opted to shop from home rather than visit high streets. E-commerce rose by 1.3% month-on-month and surged 14.7% compared to January last year, representing the largest annual increase since April 2021. The ONS also reported an uptick in online sales of sports supplements, reflecting health-focused New Year's resolutions.
Caution Amid Optimism
Despite the positive figures, some economists urge caution. Rob Wood pointed out that soaring jewellery sales, partly inflated by rising gold prices, may slightly exaggerate the overall improvement. Paul Dales, chief UK economist at Capital Economics, warned: "With employment growth weak and wage growth slowing, households won't be able to maintain this rate of spending." He added that while the health kick from New Year's resolutions has made the economy appear healthier, sustaining such spending levels could be challenging.
Cande Cooper, a retail partner at Deloitte, observed that value remains a priority for many consumers, with nearly a third leveraging in-store discounts and loyalty cards to manage costs. She noted: "The growth across non-food stores and household goods stores points to consumers prioritising finding the best deals, but the bigger picture could be that some are starting to loosen the purse strings."
Overall, the January retail sales data signals a promising start to the year for the UK economy, driven by strategic consumer purchases and favorable economic conditions, though underlying challenges in employment and wages persist.
