UK retail sales showed strong signs of recovery in January 2026, bouncing back from a lackluster holiday season. According to the latest figures from the British Retail Consortium (BRC) and KPMG, total retail sales grew by 2.7% year-on-year for the four weeks ending January 31. This growth outpaced both the 12-month average of 2.3% and the performance seen in January 2025.
The rebound appears to reflect a clear shift in consumer behaviour. Many shoppers delayed discretionary purchases during December and instead waited for New Year and January sale promotions. Helen Dickinson, Chief Executive of the BRC, described the result as a recovery from “a drab December.” She noted that seasonal offers and stronger footfall in physical stores were key drivers of the momentum.
Food sales led the recovery, rising 3.8% compared with January 2025. Non-food sales also improved, posting a 1.7% year-on-year increase—above their long-run average of approximately 1.1%. Notably, in-store non-food sales grew by about 2.0%, signaling a partial return to brick-and-mortar shopping. Meanwhile, online non-food sales saw a modest gain of 1.3%, suggesting that while e-commerce remains steady, physical stores are regaining some appeal.
Market analysts link this uptick directly to promotional activity. Linda Ellett, UK Head of Consumer, Retail & Leisure at KPMG, stated that January discounts “enticed consumers to spend.” She highlighted particularly strong demand in personal electronics, furniture, and children’s clothing and toys—categories that often benefit from post-holiday deals.
This positive start to 2026 follows a notably weak December 2025. During the festive period, total UK retail sales grew by just 1.2% year-on-year—well below the annual average and slower than December 2024. Non-food sales were especially sluggish, as higher household costs and cautious spending dampened demand. Analysts characterized the month as a challenging trading environment, with consumers tightening their belts amid persistent economic pressure.
Inflation continues to shape the retail landscape. Earlier BRC data showed that shop price inflation accelerated in January, affecting both food and non-food categories. Rising business energy costs and increased national insurance contributions contributed to these price hikes, adding further strain on household budgets.
While the January rebound offers encouraging signs of consumer resilience, experts urge caution. Sustained growth will depend heavily on broader economic conditions—including inflation trends, wage growth, and overall consumer confidence. Retailers successfully used promotions to drive short-term sales, but converting this into lasting volume growth remains difficult in an environment of cautious spending.
Overall, the January results paint a picture of pent-up demand released through strategic discounting. They also highlight the ongoing tension between temporary promotional boosts and the structural challenges facing UK retailers in 2026. As the year progresses, continued monitoring of consumer sentiment and macroeconomic indicators will be essential to gauge whether this rebound marks the start of a sustained recovery—or merely a seasonal blip.
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