Retail sales rise at fastest rate in two years

January shoppers spent the most in more than two years as the quantity of goods bought increased for the 33rd consecutive month - comfortably beating analyst expectations.

Deflationary pressures are also evident with average store prices, excluding petrol, falling by 2.6% in January 2016 compared to the same month last year, according to the Office for National Statistics (ONS).

This is the 19th consecutive month of year-on-year price falls.

Despite prices falling, the number of goods purchased grew sufficiently to allow the total amount spent to increase by 2.4% in January compared to January 2015.

Meanwhile, prices were also falling month-on-month with January prices 2.3% lower than those of December last year.

Shoppers seem to be doing more of their buying online with the value of online sales increasing by 10.4% in January 2016 compared with January 2015 and increasing by 2.7% on December 2015.
The amount spent online in January 2016 with department stores increased by 28% compared with January 2015 - the largest year-on-year growth since December 2013.

This compares to in-store department store sales growth of 6.6% over the same period.

Source : Sky News
http://news.sky.com/story/1644752/retail-sales-jump-is-highest-in-over-two-years

Analyst View:

Martin Lane, a representative at www.money.co.uk gave us his view:

“With retail sales higher than expected last month, it’s great news that consumers took advantage of the January sales to pick up some bargains. However, this jump in spend could simply be a sign of increased consumer debt. So while retailers may be rubbing their hands together with glee, this could spell hard times ahead for shoppers who can’t pay off their debts.

“This is a consistent trend that we are likely to see throughout the year. Recent reports predict that by the end of 2016, the average UK household is likely to owe nearly £10,000 in unsecured debt and in the run up to Christmas, we broke an eight year record for borrowing during a single month. This is a clear health warning for consumers, do not borrow more than you can afford to pay back quickly. Credit card interest soon mounts up when you’re not on a 0% deal and no bargain is worth the sleepless nights caused by unmanageable debt.”