UK retail sales decline in January

Retail sales in the UK fell back in January following a small increase over the Christmas period.

Figures from the Office for National Statistics (ONS) revealed a 0.3 per cent drop during the past month. It was a disappointing result after the 0.2 per cent rise in December but was a 5.4 per cent increase on the same period a year earlier. It represented a 22nd month of consecutive year-on-year growth and the longest period of sustained growth since May 2008.

January saw rises in purchases at petrol station and department stores but this strong performance in this area was hampered by pressure from food stores, textile, clothing and footwear, alongside other outlets. The total spend for January 2015 was up 2.3 per cent compared to the same period last year with consumers splurging £6.5 billion during the month.

The start of the year is a traditional sales period with consumers looking to pick up some bargains after the Christmas rush. It also provides stores with an opportunity to sell off some of the stock left over from the festive month.

Howard Archer, chief European and UK economist at IHS Economics, said: "The prospects for retail sales and consumer spending overall for 2015 currently look bright given significantly improving real earnings growth, rising employment and elevated confidence. Furthermore, it now looks highly possible that interest rates will not rise until 2016."

Black Friday impact

The rise of Black Friday in recent years has had an impact on the traditional sales period. The event, which takes place on the Friday after Thanksgiving in the US and has spread to other countries, is build as an ideal pre-Christmas sales period and the ONS has previously suggested that it impacts the festivities sales.

In January, the ONS highlighted Black Friday as being partly responsible for a lower-than-expected rise in UK retail sales for December. Monthly sales grew by 0.4 per cent, compared with a 1.6 per cent rise in November.