January sales see shoppers splash the cash as high street bounces back after gloomy Christmas

Retail sales bounced back in January after a gloomy Christmas, driven by discounting and continued demand for jewellery as supermarkets remain under pressure.

The Office for National Statistics (ONS) said the total volume of retail sales rose by 1.8 per cent in January, up from 0.4 per cent in December.

It marks the biggest increase since May 2024, driven by demand for artwork and antiques and continued strong sales from online jewellers.

Watches and jewellery sales values rose 2.5 per cent month-to-month, and 12.6 per cent over the year, which helped to push the overall figure higher.

Meanwhile, online sales surged by 19.6 per cent year-on-year, helped by sports supplements sales.

However, the ONS warns that month-by-month sales can be 'volatile', with volumes in the three months to January rising just 0.1 per cent. Better petrol sales helped to offset a continued decline in sales at supermarkets.

Continued demand for jewellery helped to push January retail sales higher

It comes after the ONS revised down its estimate for November to a fall of 0.1 per cent.

AJ Bell's Danni Hewson said: 'Last month's surge in retail sales should be taken with a big pinch of salt, with the sluggish 0.1 per cent growth seen over the three months to January more in line with continued consumer caution.

'It's clear consumers are still under pressure and still making complicated decisions about where to spend every penny.'

Looking ahead, Rob Wood, chief UK economist at Pantheon Macroeconomics said retail sales 'will correct down in February as some erratic factors unwind'.

While the figures show tentative signs of recovery, retailers have warned of a fresh wave of job losses as struggling firms prepare to lay off workers.

This week the ONS said the number of people officially at risk of redundancy jumped by 29 per cent in January to 27,279.

The worst-hit sector was 'distribution, hotels and restaurants', which includes high street retailers as well as hospitality, where there was a 272 per cent increase to 8,165.

Allen Simpson, chief executive of UKHospitality, said the 'worrying spike' should set alarm bells ringing.

He added: 'It is yet more evidence that rising business costs – from wages to energy to business rates – are placing unsustainable pressure on employers operating on razor-thin margins.

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