Report Summary

Period covered: 4 – 31 January 2026

3 minute read

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30-day membership trial now.

Retail Sales Performance:

Retail sales growth rose xx% year-on-year in December according to the Retail Economics Retail Sales Index, compared to a three-month average of xx%.

Factors impacting the headline performance in the month include:

Clearance-led rebound: January sales drove the strongest non-food performance in over six months, as shoppers delayed discretionary purchases to take advantage of clearance pricing. Heavy discounting across clothing, homewares and electricals released pent-up demand, allowing retailers to convert excess seasonal stock into sales and lift transaction values.

Severe weather: January was among the wettest on record in parts of the UK, with southern England receiving xx% more rainfall than average and multiple named storms causing widespread disruption. With footfall down as a result, online sales rose to the highest level in almost five years.

Digital content: Cold, dark conditions also redirected discretionary spend towards in-home entertainment. Spending on digital content and subscriptions rose xx% year-on-year, according to Barclays, and xx% of consumers reported watching more films and television due to the weather. This supported retail categories linked to at-home consumption while dampening leisure out-of-home.

Footfall decline: Total UK retail footfall fell xx% YoY in January, with weekday footfall down xx% YoY as storms and persistent rainfall disrupted travel. High streets and shopping centres saw footfall fall xx% and xx% YoY respectively. Retail parks were the only destination to record growth, with footfall rising xx% YoY, including a xx% uplift at weekends when weather conditions improved, reflecting the continued appeal of accessible, convenience-led locations.

Macroeconomic environment: Economic conditions became slightly more supportive for household spending, with several measures (including inflation, wage growth and consumer confidence) supporting spend.

Category impact

Non-food categories had a stronger performance in January, with non-food sales rising xx%.

Clothing (+xx% YoY) and Footwear (+xx%) improved through markdown-led sell through. Children’s clothing and practical replenishment lines performed well, consistent with functional post-Christmas spending. 

Health & Beauty (+xx%) was the strongest performing category as consumers prioritised wellness, supplements and personal care.

Homewares (+xx%) and Furniture & Flooring (+xx%) benefited from traditional winter sales events and smaller refresh purchases.

While Electricals (+xx%) continued to be one of the lower-growth categories, aggressive promotional activity and replacement purchasing meant it had a better month.

DIY and gardening saw muted growth than most others, with sales rising xx% as adverse weather constrained project triggers.

Food sales rose xx%. Value growth continued but volumes were flat. Record own-label penetration and elevated promotional participation confirmed that shoppers remain value-focused.

Macroeconomic backdrop

While consumer confidence rose one point to xx in January, the highest reading since mid-2024, consumers continue to be pessimistic about the wider economy. They are, however, more optimistic about their personal finances, with the measure in positive territory at +xx  

Inflation fell to xx%, the lowest rate in nearly a year, with easing energy costs and stabilising food prices driving the decline.

The Bank of England held rates at xx% in February and with inflation softening, markets increasingly expect a cut to xx% in March, offering the prospect of further easing for household budgets.

Wage growth has cooled but remained positive in real terms: average earnings were rising about xx% YoY in late 2025, implying a modest gain in purchasing power.

Housing conditions offered cautious encouragement. A xx% monthly increase in house prices and a return to annual growth signalled greater balance-sheet stability. Mortgage approvals remain subdued, suggesting recovery will be gradual rather than rapid.

However, GDP and the labour market provided less positive news. GDP was essentially flat in Q4 2025, although a tentative uplift is expected. The labour market, meanwhile, saw unemployment rise above xx%.

Overall, January’s consumer environment stabilised slightly compared to recent months, but remains far from buoyant.

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Confidence rises in January