Retail sales, Great Britain: January 2020

• In the three months to January 2020, the quantity bought in the retail sales industry fell by 0.8% when compared with the previous three months, with declines across all sectors.

• Retail volumes increased by 0.9% in January 2020, recovering from the falls in the previous two months; the increase was mainly because of moderate growth in both food stores (1.7%) and non-food stores (1.3%).

• Fuel saw a large fall of 5.7% in the quantity bought in January 2020 when compared with December 2019, which coincides with a rise in fuel prices of 2.3 pence per litre between December and January (consumer price inflation, January 2020).

• Online sales as a proportion of all retailing was 19.0% in January 2020, down from 19.3% in December 2019.

In the three months to January 2020, both the amount spent and the quantity bought in the retail industry fell by 0.5% and 0.8% respectively when compared with the previous three months (Table 1).

In contrast, the monthly picture was one of growth at 1.2% and 0.9% for the amount spent and the quantity bought respectively, mainly because of a recovery from a weak November and December 2019. When compared with a year earlier, both measures reported growth at 2.1% for the amount spent and 0.8% for the quantity bought.

The longer-term trend provides a fuller picture of what is happening in the retail sector (Figure 1).

Figure 1 shows the quantity bought in retail sales over time for both the rolling three-month on three-month and the month-on-month movement. While both series show a general increase, the monthly path shows more volatility than the smoother three-month on three-month series.

Since June 2019, there has been a slowdown in the quantity bought, with successive declines in the three-month on three-month movement from November 2019. The quantity bought in January 2020 when compared with the previous three months was negative 0.8%.

While the monthly growth rate in January 2020 increased by 0.9%, this follows two consecutive months of decline in November 2019 at 0.8% and December at 0.5%.

Table 2 shows the month-on-month and the three-month on three-month growth rate in the quantity bought for each retail sector in January 2020.

The monthly growth rate shows that all sectors except household goods stores and fuel stores increased in the quantity bought, resulting in an overall increase of 0.9%. The large decline in fuel stores coincided with a large rise in fuel prices (Figure 2).

As seen in Table 2, the quantity bought in fuel stores decreased by 5.7% in January 2020 when compared with December 2019. Fuel prices also increased by 2.3 pence per litre between December 2019 and January 2020 (consumer price inflation, January 2020), which has resulted in consumers getting less for their money when they fill their tanks. Some anecdotal feedback from retailers also suggested the wet weather in parts of the country may have reduced fuel sales.

The fuel average store price (also known as the implied deflator) shows a sharp increase between December and January (Figure 2).

A continued increase in fuel prices was seen from March 2019 until a sharp fall in prices in June 2019. August 2019 was the exception to a general fall in prices until January 2020, with an increase of 1.9% when compared with December 2019.

The overall increase of 1.2% for the amount spent and 0.9% for the quantity bought in January 2020 compared with the previous month was because of positive contributions in all sectors except fuel stores.

Food stores was the largest contribution for the quantity bought at 0.7 percentage points, while non-food stores was the largest contribution for the amount spent at 0.9 percentage points.

Non-store retailing, at 1.2 percentage points for both measures, was the largest contribution to the overall growth of 2.1% for the amount spent and 0.8% for the quantity bought.

Negative contributions to the year-on-year growth came from the quantity bought in food stores at negative 0.1 percentage points and fuel stores at negative 0.3 percentage points.

Table 3 shows the month-on-month and year-on-year growth rates for the amount spent online, in addition to the proportion of online sales. The percentage weights indicate where money is spent online.

Online spending increased in January 2020 at 0.9% when compared with December 2019, with strong growth in food stores at 5.7% and non-store retailing at 5.1%.

The strong decline of negative 6.8% in non-food stores was largely down to big falls in department stores (negative 4.8%) and household goods stores (negative 26.7%). These stores experienced strong growth in the previous month at 16.9% for department stores and 19.6% for household goods stores.

Internet sales increased by 4.9% in January 2020, when compared with January 2019. Other stores and non-store retailing both reported strong growth at 11.5% and 9.9% respectively, while department stores reported the largest fall at negative 14.4%.

Online sales as a proportion of all retailing was 19.0% in January 2020, down from 19.3% in December 2019.

Value (amount spent)

The value estimates reflect the total turnover that businesses have collected over a standard period.

Volume (quantity bought)

The volume estimates are calculated by taking the value estimates and adjusting to remove the impact of price changes.

Seasonally adjusted

Seasonally adjusted estimates are derived by estimating and removing calendar effects (for example Easter moving between March and April) and seasonal effects (for example increased spending in December as a result of Christmas) from the non-seasonally adjusted (NSA) estimates.

Non-seasonally adjusted

Non-seasonally adjusted estimates refer to raw data where the effects of regular or seasonal patterns have not been removed.

Non-store retailing

Non-store retailing refers to retailers that do not have a store presence. While the majority is made up of online retailers, it also includes other retailers such as stalls and markets.

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the five-week period 29 December 2019 to 1 February 2020.

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 5,000 businesses in the retail industry, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month. 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).

Quality

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Retail sales QMI.

This year, with another full year's data, we will be undertaking our annual update of our commodity deflators to improve our estimates of volumes sold.

Uses and users

The Retail Sales Index (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 HM Treasury to assist in informed decision- and policy-making.

Comparability with international data

The most recent international estimate of retail sales available for January 2020 was published by the US Census Bureau on 14 February 2020. In its advanced monthly sales for retail and food services, January 2020 (PDF, 1.46MB) they include the amount spent in the US retail industry, including motor vehicles and parts and food services.

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 for a variety of reasons, including differences in methodology.

Eurostat also published their latest estimates of the Volume of retail trade (PDF, 502KB) across the European Union on 7 January 2020 for November 2019. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with September 2019.

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020.

After the transition period, we will continue to produce our national accounts statistics in line with the UK Statistics Authority's Code of Practice for Statistics and in accordance with internationally agreed statistical guidance and standards.

The Withdrawal Agreement outlines a need for UK gross national income (a fundamental component of the national accounts, which includes gross domestic product (GDP)) statistics to remain in line with those of other EU countries until the EU budgets are finalised for the years in which we were a member. To ensure comparability during this cycle, the national accounts will continue to be produced according to European System of Accounts (ESA) 2010 definitions and standards.