The UK retail sector rung in 2025 with a total sales increase in January of 2.6%, marking the most substantial growth experienced in nearly two years, according to the British Retail Consortium (BRC) and KPMG retail sales monitor.

This performance from the UK retail sector eclipses the 1.2% growth observed in the same month of the previous year and outstrips both the three-month average growth rate of 1.1% and the 12-month average of 0.8%. 

“January sales kicked off a solid month for retail with stores delivering their strongest growth in almost two years, albeit on a weak comparable,” says Helen Dickinson, British Retail Consortium chief executive. 

Under the online sales category growth rankings, clothing was down, while home textiles, footwear, health and beauty, home accessories, and other non-food categories were up in January compared to December 2024. 

Looking at the January contribution to total sales growth by category, all non-food categories showed growth except toys and baby equipment. 

“Consumers headed to the shops to refresh their homes for the year ahead, taking advantage of big discounts on furniture, bedding and other home accessories. With growth across nearly all categories, only toys and baby equipment remained in decline. While the bouts of stormy weather put a temporary dampener on demand, sales growth held up well throughout the rest of the month. This was also helped by the earlier start of the reporting period, adding a few more post-Christmas shopping days into the mix,” Dickinson added. 

Non-food store sales rose by 2.5% in January, rebounding from a 2.8% decline in January 2024. This exceeded both the three-month average growth of 0.2% and the 12-month average decline of 1.1%. 

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In-store non-food sales in the UK rose by 2.6% in January, reversing a 2% decline in January 2024. This growth outpaced both the three-month average decline of 0.7% and the 12-month average decline of 1.7%. 

Online non-food sales grew by 2.2%, reversing a 4.2% decrease from January 2024. Despite this growth, online penetration for non-food items dipped slightly to 35.7%.  

Food stores also reported an increase of 2.8% in January sales, although this was slower than the 6.1% surge seen in January of the previous year. 

KPMG UK consumer, retail & leisure head Linda Ellett said: “2025 got off to a welcome start for retailers with much needed sales growth in January. But viewed over a three-month period that included Christmas and Black Friday, non-food sales have flatlined. Overall, the golden quarter failed to shine. 

“The trading environment remains tough for retailers, with consumer demand still subdued and household essential bills still high. Business costs are also coming under pressure, with rising employment costs only increasing that in the coming months. Boardroom focus on costs and competitiveness is sharpening. Pricing adjustments, product launches, store closures, job losses, and increased automation and AI are all set to reshape the retail landscape in 2025.” 

Insights from BRC and Opinium data last month highlighted a sombre mood in UK retail for January, as consumer economic sentiment dropped to a record low of -34, with the greatest concern seen among the senior demographic. 

By Just Style