British retailers recorded a stronger-than-expected start to 2026, with January sales growth accelerating as consumers responded to post-Christmas promotions and showed early signs of renewed spending confidence.
According to new data published by the British Retail Consortium, total UK retail sales rose 2.7% year-on-year in January, a marked improvement on December’s 1.2% increase and the fastest pace of growth since last summer.
Food sales led the uplift, rising 3.8% compared with the same period last year, while non-food sales increased by 1.7%. Like-for-like sales — which strip out the impact of store openings and closures — climbed 2.3%, also the strongest reading since August.
The BRC said the improvement reflected consumers delaying spending until January to take advantage of seasonal discounts, particularly across discretionary categories that underperformed in the run-up to Christmas. In-store sales growth also outpaced online performance, supported by stronger footfall in physical retail locations.
Helen Dickinson, chief executive of the British Retail Consortium, said: “January sales got off to a positive start as shoppers took advantage of promotions and discounts after holding back spending at the end of last year. Food performed particularly well, while some non-food categories also saw a welcome boost.”
She added that while the figures offered encouragement, retailers remained cautious given the ongoing pressures facing household budgets.
The January results follow a mixed trading environment at the end of 2025, when retailers reported uneven Christmas performance and continued sensitivity to price among consumers. Elevated living costs and subdued real-terms income growth have constrained spending for much of the past year, prompting many households to prioritise essentials and value-led purchases.
Industry analysts said the January uplift should be interpreted carefully. While headline sales growth strengthened, it continued to lag consumer price inflation, indicating that volumes remain under pressure in parts of the market.
Paul Martin, UK head of retail at KPMG, said the data pointed to “tentative stabilisation rather than a full recovery”, noting that discount-driven demand can weigh on margins if sustained for long periods.
“There are signs that consumers are becoming slightly more confident, but that confidence remains fragile,” Martin said. “Retailers are still balancing the need to stimulate demand with the challenge of protecting profitability.”
Category-level data showed stronger interest in electronics, home furnishings, children’s clothing, and toys, suggesting some release of pent-up discretionary demand following a cautious final quarter in 2025. Value-focused retailers and those with well-integrated online and in-store propositions were among the strongest performers.
The retail update also coincided with broader signs of modest economic improvement at the start of the year, including stronger business activity surveys and easing supply-chain pressures. However, sector leaders warned that any improvement could prove short-lived if inflation remains sticky or employment conditions weaken.
For now, January’s performance provides a more positive opening note for the year, offering retailers a narrow window to rebuild momentum after an extended period of subdued growth. Whether that momentum can be sustained into the spring will depend on the resilience of consumer confidence and the sector’s ability to manage costs without relying heavily on discounting.
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