Retail sales jump to two-year high in January

• Year-on-year sales volumes rose 4.5% in January, with three-month sales up 2.6% compared to the same period a year earlier
• Online retail spending increased 14.7% year-on-year, the strongest annual growth since April 2021, with sports supplements and jewellery hitting record demand
• Automotive fuel and non-food stores led the recovery, including gains in household goods, computer retailers, and auction houses, partially offset by small declines in supermarkets and department stores

Summary: UK Retail Sales Surge to Two-Year High in January 2026

UK retail sales volumes jumped 1.8% in January 2026, marking the strongest monthly increase since May 2024, according to the Office for National Statistics (ONS). This followed a modest 0.4% rise in December 2025 and a November decline.

Key Figures:

• Month-on-month: +1.8% volume increase
• Year-on-year: +4.5% growth in sales volumes
• Three-month comparison: +0.1% versus previous quarter, +2.6% year-on-year
• Overall retail spending: +1.6% in January

Sector Performance:

The growth was driven primarily by automotive fuel sales, which rebounded after October 2025's decline. Non-food stores showed strength, including computer and telecom retailers, household goods stores, and commercial art galleries. Seasonal furniture sales and a strong November for hardware stores contributed to gains. Supermarkets and department stores saw minor declines.

Auction houses for artwork and antiques experienced higher volumes, while mail order retailers thrived, particularly in sports supplements and jewelry, with demand reportedly reaching record highs.

Online Shopping Dominance:

Online spending posted exceptional growth: +1.3% versus December 2025 and +14.7% year-on-year—the strongest annual growth since April 2021. Over three months, online spending rose 1.8% compared to the previous quarter and 10.8% year-on-year.

Market Implications:

Rob Wood, chief UK economist at Pantheon Macroeconomics, indicated the rebound signals consumer activity stabilization after uncertainty, with households gradually returning to spending, providing a positive outlook for the broader economy.

The survey achieved a 57.2% response rate, covering 91.5% of total turnover.