UK retail gross sales began 2026 on a powerful footing, with January marking the quickest progress since August as meals spending and in-store exercise rebounded.
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Abstract:
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UK retailers reported their strongest gross sales progress since August, pointing to a stable begin to 2026.
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January beneficial properties have been pushed by meals spending and a rebound in in-store exercise.
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Like-for-like gross sales additionally strengthened, suggesting improved underlying demand somewhat than retailer enlargement results.
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The information provides to tentative indicators that client sentiment has stabilised following the federal government’s November finances.
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Analysts warning that the outlook nonetheless hinges on inflation, wage progress and interest-rate expectations.
UK retailers reported a notably stronger begin to 2026, with January gross sales knowledge pointing to a pickup in client spending momentum after a subdued second half of final yr.
In accordance with figures from the British Retail Consortium, whole retail gross sales rose 2.7% year-on-year in January, greater than double December’s tempo and the strongest improve since August. Like-for-like gross sales, which modify for retailer openings and closures, climbed 2.3%, additionally marking the most effective efficiency in a number of months and suggesting a real enchancment in underlying demand.
Meals spending was the primary driver of the rebound. Analysts observe that meals gross sales grew at a strong tempo, reflecting each greater volumes and sustained worth pressures, whereas non-food classes additionally returned to optimistic territory. The strongest progress was recorded across the flip of the yr, as buyers responded to post-holiday promotions and January gross sales occasions.
A notable characteristic of the January knowledge was the advance in bodily retail. In-store gross sales elevated at their quickest tempo in six months, indicating that footfall has begun to recuperate after a chronic interval of weak spot. Analysts say this shift could replicate easing strain on family budgets, in addition to elevated client confidence heading into the brand new yr.
The upbeat retail figures add to rising proof that sentiment has stabilised following the federal government’s autumn finances. Official knowledge launched in late January additionally confirmed a stronger-than-expected rise in retail gross sales in December, reinforcing the view that family spending held up higher than feared by means of the year-end interval.
That stated, analysts stay cautious about extrapolating an excessive amount of from a single month of information. Whereas January’s efficiency suggests shoppers have gotten extra keen to spend, the outlook for discretionary demand stays delicate to inflation traits, wage progress and the trail of rates of interest. Elevated borrowing prices and lingering cost-of-living pressures proceed to constrain family funds, significantly for non-essential purchases.
Total, analysts see the January rebound as an encouraging sign for the retail sector, however stress that sustained enchancment would require continued progress on inflation and actual earnings progress over the course of 2026.
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