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Retail sales volumes bounced back into stronger than expected growth in January following record falls in December, boosted by a recovery in food sales volumes.

The Office of National Statistics found volumes rebounded by 3.4% in January following a 3.3% slump in December (revised further down from the initial estimate of a fall of 3.2%).

This represented the largest monthly rise since April 2021 and returned volumes to November 2023 levels.

Sales volumes in all subsectors except clothing stores increased over the month, with food stores such as supermarkets contributing most to the increase.

Food store sales volumes rose by 3.4% over the month (0.6% over the year), recovering from December’s record fall of 3.1%. Within food stores, the fall in December 2023 and recovery in January 2024 was mainly because of supermarkets, the ONS said.

Non-food stores sales volumes (the total of department, clothing, household and other non-food stores) returned to broadly expected levels, with a rise of 3.0% over the month following a 3.9% fall in December.

Some of the fall in December was because of consumers purchasing Christmas gifts earlier, during the November Black Friday discounts. But 46% of surveyed adults still reported plans to spend less on Christmas shopping because of the rising cost of living.

Sales volumes in department stores and other non-food stores (such as sports equipment stores) rose over the month by 5.4% and 6.2% respectively, with some retailers reporting the positive impact of January sales.

Household goods stores rose by 1.8% in January 2024, which was mainly because of sales in hardware stores, while clothing stores fell by 1.4%.

Automotive fuel sales volumes rose by 5.4% over the month (0.5% over the year), with falling fuel prices possibly meaning people bought more.

The amount spent online, known as online spending values, fell by 4.1% over the month to January 2024.

More broadly, sales volumes fell by 0.2% in the three months to January when compared with the previous three months, however this was the smallest fall since August 2023.

Consumers spent more for less in January 2024, as the 3.9% monthly rise in sales values (the amount spent) exceeded the 3.4% rise in sales volumes.

Looking over a longer period, sales volumes rose 0.7% between January 2024 and January 2023 but were still 1.3% below their pre-pandemic level in February 2020.

Morning update

Reckitt Benckiser has announced the appointment of Fiona Dawson to the board as a non-executive director and as chair designate to the remuneration committee effective 1 June 2024.

Dawson was previously global president for food, drinks and multisales at Mars, sitting on its global leadership team. She rose from the graduate trainee scheme to roles including president of global retail of Mars Chocolate UK and European marketing VP, where she made an enduring impact in her three decades at the business.

She is currently a non-exec director of Marks & Spencer, Lego and Kerry Group.

Alan Stewart, non-exec director and chair of the remuneration committee, has informed the company of his intention to retire from the board with effect from the conclusion of the company’s AGM to be held on 2 May 2024.

Mary Harris, designated non-exec director for engagement with the company’s workforce and former chair of the company’s remuneration committee, will be reappointed as chair of the remuneration committee from the conclusion of this year’s AGM until the conclusion of the company’s 2025 AGM, when Dawson will take over.

Chris Sinclair, chair of the board, said: “I would like to thank Alan for his contribution to our board and remuneration committee. We wish him every success in the future. We are delighted Fiona Dawson will be joining the Reckitt board as the long-term chair of the remuneration committee.

“She brings extensive consumer products experience from her three decades at Mars and has a passionate commitment to sustainability, health and wellbeing, particularly women’s entrepreneurship and human rights.”

On the markets this morning, the FTSE 100 is up another 0.7% to 7,652.1pts.

Early risers include Glanbia, up 3.7% to €16.48, Nichols, up 2.4% to 1,034.9p and THG, up 1.9% to 70p.

Fallers include Naked Wines, down 1.4% to 73p, Kerry Group, down 0.9% to €79.20 and Imperial Brands, down 0.4% to 1,824p.

Yesterday in the City

The FTSE 100 shrugged off the news that the UK entered recession in the final quarter of last year by closing up 0.4% at 7,597.5pts.

Kerry Group fell back 2.3% to €79.90 after posting its full year results yesterday.

Other fallers included Imperial Brands, down 3.3% to 1,830.5p, Domino’s Pizza Group, down 2.3% to 352p, PayPoint, down 2% to 502p, Marks & Spencer, down 1.4% to 231.7p and Cranswick, down 1% to 3,950p.

Risers included Nichols, up 3.1% to 1,010.5p, Coca-Cola HBC, up 2.4% to 2,440p, Just Eat, up 2% to 1,328p, Hilton Food Group, up 1.8% to 781p, Naked Wines, up 1.8% to 74p and Fever-Tree Drinks, up 1.8% to 1,044p.

In Paris Pernod Ricard closed up 1.8% to €157.50 after posting better than forecast annual results.