January brought a welcome increase in spend for retailers after a “drab” December, according to the BRC.
Total UK retail sales were up 2.7% year on year in January, compared with an average 2.3% growth over 12 months, as shoppers went bargain hunting in the sales after tightening their belts at Christmas, according to the latest BRC-KPMG Retail Sales Monitor. The growth built on a 2.6% year-on-year increase in sales in January 2025.
However, in food & drink, shopper confidence was “muted” amid concerns about inflation. Food sales increased by 3.8% year on year in January, flat against the 12-month average, which was also 3.8%. It built on 2.8% growth in January 2025.
Non-food sales increased by 1.7% year on year in January, against growth of 2.5% in January 2025. This was above the 12-month average of 1.1% growth.
In-store non-food sales increased by 2.0% year on year in January, above the 12-month average of 0.9% growth. This was against growth of 2.6% in January 2025.
“A drab December gave way to a brighter January as retail sales picked up pace,” said BRC CEO Helen Dickinson.
“Many shoppers had held off Christmas spending and waited for the January sales, with the start of the new year showing the strongest growth. And bargain hunting was not limited to online, with in-store sales showing the highest growth in over six months.”
Commenting on the food & drink sector’s performance, IGD CEO Sarah Bradbury said: “After the end-of-year festivities, shopper confidence was muted in January, primarily driven by concerns about future price rises.
“January also brought with it extensive new grocery retail product launches, particularly centred around health, encouraging health-minded shoppers to trial something new.
“The outlook for 2026 indicates that food inflation will persist for some time, meaning some shopper concerns are well-founded. As a result, we expect shoppers to continue to scrutinise their purchasing.”
Online non-food sales increased by 1.3% year on year in January, against a growth of 2.2% in January 2025. This was below the 12-month average of 1.4% growth.
The proportion of non-food items bought online was 37.2% in January, up from 35.7% in January 2025. This was below the 12-month average of 37.4%.
Dickinson cautioned: “While retailers welcomed the increase in spending, many challenges remain in 2026.
“Consumer confidence, while improving, remains weak; costs of energy and packaging are rising, and the new Employment Rights Act could limit the ability of retailers to offer more flexible jobs.
“The government must focus on getting the last of these right – ensuring protections for workers without damaging the availability of the jobs themselves. This is essential as unemployment continues to climb.”
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