Retail sales, Great Britain: January 2019

• In the three months to January 2019, the quantity bought increased by 0.7% when compared with the previous three months.

• The monthly growth rate in the quantity bought increased by 1.0% in January 2019, following a decline of 0.7% in December 2018.

• Year-on-year growth in the quantity bought in January 2019 was 4.2%, the highest since December 2016; while year-on-year average store prices slowed to 0.4%, the lowest price increase since November 2016.

• The quantity bought in textile, clothing and footwear stores showed strong year-on-year growth at 5.5% as stores took advantage of the January sales, with a year-on-year price fall of 0.9%.

• As food store prices experienced a general slowdown throughout 2018, the quantity bought in January 2019 returned to the strong growth experienced in the summer months at 3.2%.

• Online sales as a total of all retailing decreased to 18.8% in January 2019, from the 19.8% reported in December 2018.

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the four-week period 30 December 2018 to 26 January 2019.

Unless otherwise stated, the estimates in this release are seasonally adjusted.

Retail sales collects turnover data from retailers, which is money through the till before any deductions, including refunded items. This provides us with the best indicator for consumer spending during the reference period.

The Retail Sales Index (RSI) measures the value and volume of retail sales in Great Britain on a monthly basis. Data are collected from businesses in the retail industry and the survey’s results are used to produce seasonally adjusted monthly, quarterly and annual estimates of output in the retail industry at current price and at chained volume measures (removing the effect of price changes).

The RSI is an important economic indicator and one of the earliest short-term measures of economic activity. It is used in the compilation of the national accounts and widely used by private and public sector institutions, particularly by the Bank of England and Her Majesty’s Treasury to assist in informed decision- and policy-making.

Summary information can be found in the RSI Quality and Methodology Information report.

In January 2019, estimates for both the amount spent (value) and quantity bought (volume) in retail sales increased across all measures (Table 1).

When compared with the same month a year earlier, January shows a strong rate of growth at 4.5% for the amount spent and 4.2% for the quantity bought. Both the month-on-month and three-month and three-month estimates showed a slower rate of growth. The three-month on three-month movement increased by 0.6% for the amount spent and 0.7% for the quantity bought.

The general long-term trend is one of growth, which is seen in the year-on-year growth rate in Table 1. The three-month on three-month growth rate, in contrast, shows that in recent months sales have slowed for both measures from September 2018 to January 2019.

From January 2015, the trend in the amount spent remained relatively flat as the quantity bought increased at a faster rate up to January 2016. Sales began to increase at a stronger rate of growth from January 2016 for both the amount spent and quantity bought. From January 2017, the amount spent continued to increase at a steady rate, while the quantity of goods bought slowed to increase at a slower pace. In later months, from September 2018, growths for both measures slowed in the three months to January 2019.

Despite some volatility in the series, the year-on-year growth for the quantity of goods bought shows a general slowdown to October 2017 at 0.1%; this is from a growth of 2.2% in January 2017 (Figure 2).

In May 2018, we saw a sharp increase to growth at 4.0%, which is compared with a weak year-on-year growth of 0.9% in May 2017. Feedback from retailers suggested that a change to sustained warm weather following the adverse weather seen earlier in 2018 had seen increases in consumer spending in May 2018; this was supported by the Met Office's weather summary for May 2018.

While a general slowdown to the year-on-year growth followed this sharp increase in May 2018, January 2019 has broadly returned to the same rate experienced in the summer with a growth rate of 4.2%; the highest since December 2016. This has coincided with a slowdown in the average store price (or often referred to as the “implied deflator”) to 0.4% (Figure 3).

Figure 3 shows that the average store prices declined throughout most of 2016 as prices began to rise in November 2016. With strong and steady increases up to May 2017 at 3.1%, prices began a general slowdown from September 2017.

In January 2019, prices slowed to 0.4%; the slowest price growth since November 2016. Price information used in retail sales is obtained from the Consumer price inflation, UK: January 2019 bulletin, released on 13 February 2019.

What is happening in each sector?

Table 2 shows the year-on-year growth rate for the amount spent, quantity bought and average store price (non-seasonally adjusted).

Department stores were the only stores to show a decrease in both the quantity bought and the amount spent at negative 0.6% for both measures.

Textile, clothing and footwear stores showed strong growth at 5.5% in the quantity bought as stores took advantage of the January sales, with a price fall of 0.9%.

Non-store retailing continued to show strong growth at 14.3% for the quantity bought and amount spent, while prices remained flat. Growth in non-store retailing provided the biggest contribution to the overall year-on-year growth in retail (Figure 4).

In January 2019, all four main sectors contributed positively to both the amount spent and the quantity bought, resulting in year-on-year growth of 4.5 and 4.2 percentage points respectively (Figure 4).

Food stores provided the largest contribution to the growth in the amount spent at 1.5 percentage points. Whereas, non-store retailing reported the largest contribution to the quantity bought at 1.4 percentage points in January 2019.

All other sectors also reported positive contributions to growth for both the amount spent and quantity bought.

Figure 5 displays the contribution to month-on-month growth, with the amount spent at 0.9 percentage points and the quantity bought at 1.0 percentage point.

Food stores was the largest contributor towards the increase seen in January 2019 for the quantity bought, at 0.5 percentage points. Non-store retailing and non-food stores also reported positive contributions of 0.4 and 0.2 percentage points respectively. In contrast, fuel stores contributed negatively to the quantity bought, at negative 0.1 percentage points.

Similarly, fuel stores was the only negative contributor to the 0.9 percentage points growth reported in the amount spent, at negative 0.2 percentage points.

As the largest contributor to the monthly increase of 1.0% in the quantity bought, food stores saw a sharp increase in January 2019 (Figure 6).

Figure 6 shows that with rising food store prices seen at the beginning of the series, the quantity of goods bought in food stores continued to slow down and decline in May 2017. However, as prices began to slow down at the beginning of 2018, the picture changed to one of continued growth, reaching a peak of 3.3% in July 2018.

As food store prices continued on a general slowdown throughout 2018, the quantity bought in food stores returned to the strong growth experienced in the summer months at 3.2% in January 2019, with feedback from supermarket stores suggesting increased use of the January sales this year. The boosted sales from May to July 2018 were partly attributed to the warm weather during these months.

Online sales as a total of all retailing decreased to 18.8% in January 2019, from the 19.8% reported in December 2018. Whilst non-food stores and non-store retailers both saw falls in their proportions of online sales in January 2019, food stores saw their proportion increase to 5.8% from the 5.7% reported in December 2018.

Table 3 shows the month-on-month and year-on-year growth rates for online retailing, by sector, in addition to the proportion of online sales to all retail sales for non-seasonally adjusted data. The percentage weights indicate where money is spent online.

Online sales increased by 9.8% for the amount spent in January 2019 when compared with January 2018, with all sectors showing year-on-year growth. Non-store retailing showed the largest growth of 13.7%.

The month-on-month picture was one of declines in growth, with online sales decreasing by 33.3% when compared with December 2018, as expected following the Christmas sales. Other stores reported the largest month-on-month fall of 45.0%. All other sectors reported falls when compared with the previous month, with department stores reporting the second-largest monthly fall of 41.7%.

The most recent international estimate of retail sales available for November 2018 was published by the US Census Bureau on 14 December 2018. In its advanced monthly sales for retail and food services, November 2018 (PDF, 1590KB) they include the amount spent in the US retail industry, including motor vehicles and parts and food services.

Eurostat also published their latest estimates of the Volume of retail trade (PDF, 507KB) across the European Union on 5 February 2019 for December 2018. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with July 2018.

Data for Northern Ireland are published by the Northern Ireland Statistics and Research Agency (NISRA).

It should be noted that accurate comparisons cannot be made against these or other international statistics due to a variety of reasons, including differences in methodology.

Our Monthly Business Survey (MBS) for retail sales measures output from the retail industry in Great Britain. It samples 5,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month.

Further qualitative data or information and summary tables can be found in the attached datasets. This includes data on:

• response rates

• standard errors

• revision triangle

• distribution analysis

The Retail sales Quality and Methodology Information report contains important information on:

• the strengths and limitations of the data and how it compares with related data

• uses and users of the data

• how the output was created

• the quality of the output including the accuracy of the data