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Retail sales volumes unexpectedly bounced back into growth in January as sales and promotions boosted shopper activity.

The Office for National Statistics said retail sales volumes were up 0.5% in January 2023, following a fall of 1.2% in December 2022 (revised downwards again from a fall of 1.0%).

That reversed the wider three-month trend to January 2023, where sales volumes fell 0.9% compared with the previous three months.

However, compared with the same period a year earlier, retail sales volumes fell by 5.7% in the three months to January 2023.

Meanwhile, sales volumes remain 1.4% below their pre-coronavirus February 2020 levels.

The boost in volumes was driven by non-store retailing (predominantly online retailers), which saw sales rise by 2% in January 2023, with some feedback that January sales promotions supported the rise.

Automotive fuel sales volumes also rose by 1.7% in January 2023, following a rise of 0.3% in December 2022 as fuel prices continued to fall.

Food store sales volumes fell by 0.5% in January 2023 following a fall of 0.7% in December 2022; we continue to receive feedback that customers were buying less because of increased cost of living and food prices.

The Bank of England Agents’ summary of business conditions 2022 Q4 reported supermarkets’ feedback of customers trading down to lower-priced products. Some supermarkets reported sales are being supported by people spending less on dining out.

In-store non-food stores sales volumes rose by 0.6% over the month, following a fall of 2.5% in December 2022. Despite this pickup, sales volumes were 2.9% below their pre-coronavirus February 2020 levels.

The proportion of retail sales online fell to 25.0% in January 2023 from 25.7% in December 2022; despite this fall, it remains significantly above pre-coronavirus levels (19.8% in February 2020).

Morning update

Costa Coffee has announced that Philippe Schaillee will become CEO of the company, joining from Groupe SEB.

The appointment will be effective from 10 April.

Most recently, he has been a member of the executive committee at France-based Groupe SEB, which is a global market leader in cookware, small domestic appliances and professional coffee equipment, with brands that include WMF, Schaerer, All-Clad, Krups, Tefal and Rowenta.

In 2006, he was named EVP of the Breakfast, Snacking & Beverages division. In 2008, he was appointed SVP, chief marketing officer and executive committee member for all of the Sara Lee Group’s categories in the US.

In 2012, Schaillee returned to Europe, where he joined Jacob Douwe Egberts (JDE) Group. He was named president of the Professional Coffee Division and served as a member of their executive committee.

“Philippe is an outstanding leader who comes to Costa with a deep background in business and a passion for building great brands,” said Evguenia Stoichkova, president of global ventures for The Coca-Cola Company. “We look forward to working with Philippe to expand on the plans we have developed to grow Costa, both in its home country of England and beyond.”

“I have long admired Costa and appreciate the company’s deep history and heritage,” Schaillee said. “I am excited to join the great team at Costa and look forward to learning and growing the business with them.”

Schaillee succeeds former Costa CEO Jill McDonald. He will report to Stoichkova and will be based in London

On the markets this morning, the FTSE 100 has dropped 0.4% back to 7,977.5pts.

Risers include Kerry Group, up 4.4% to €91.04, Glanbia, up 2.8% to €11.68 and Bakkavor, up 1.5% to 111.4p.

Fallers so far include THG, down 3.3% to 57p, Ocado, down 3% to 612p and Fever-Tree, down 2% to 1,082p. 

Yesterday in the City

The FTSE 100 closed at over 8,000pts yesterday for the first time in its history, rising 0.2% to close the day at 8,012.5pts.

Devro was one of the market’s major risers, climbing 6.7% to 327p after prospective buyer Saria increased its £540m takeover offer. Devro ended the day up 6.7% to 327p.

Other risers included THG, up 3.2% to 59p, Cranswick, up 1.3% to 3,050p, Just Eat, up 1.3% to 1,943.6p, Diageo, up 1.2% to 3,593.5p and Britvic, up 1% to 812.5p.

Fallers included Imperial Brands, down 3.6% to 1,978.5p, Naked Wines, down 2.8% to 116.7p, Greencore, down 2.7% to 76.7p, Nichols, down 1.9% to 1,030p and Fever-Tree, down 1.3% to 1,104p.

In Europe, Nestlé ended the day down 2.5% to CHF107.90 after its fourth quarter sales volumes unexpectedly dropped on weakness in North America.