London (UK) – Although fast-rising inflation is limiting their buying power, British customers began to return to stores last month after many stayed away during a surge of COVID-19 cases that peaked at the turn of the year
According to the Office for National Statistics, retail sales grew by 1.9 percent in January after falling by 4.0 percent in December, the greatest increase since England’s non-essential store lockdown regulations were relaxed in April 2021.
Britain’s wider economy shrank by 0.2% in December, according to an initial estimate last week.Â
“The steady increase in retail sales volumes in January adds to the evidence that the Omicron-induced activity slowdown was smaller and less long-lasting than previously assumed. Despite this, the cost-of-living crisis means that the future for shops is bleak “Capital Economics expert Adam Hoyes stated.
Households are facing fast rising consumer price inflation, which peaked at 5.5 percent in January, the highest level in nearly 30 years, and is expected to rise above 7 percent in April, according to the Bank of England.
A different gauge of inflation used to compile January’s retail sales statistics jumped to 6.7 percent, the highest level since the data was first collected in 1997.
Fast-rising energy and food prices leave consumers with less spare income to spend on non-essentials, and 2022 is shaping up to be the worst year for household disposable income in 30 years.
Because of a significant shift to online buying, the UK retail industry as a whole fared very well throughout the COVID-19 pandemic, with sales surpassing January 2020 levels in July 2020.
Some companies, particularly clothing outlets with minimal internet presence, had a significantly more difficult time recovering from repeated lockdowns.
Clothing and footwear sales declined 5.0 percent in January, according to the ONS, possibly due to smaller-than-usual seasonal discounts, and are now 13 percent below pre-pandemic levels.
Some pandemic trends have begun to shift. In January, the percentage of sales made online declined to 25.3 percent, the lowest level since March 2020, but still significantly above the 19.8 percent seen in February 2020, before the pandemic.