1. Main points

  • In January 2017, the quantity bought in the retail industry is estimated to have increased by 1.5% compared with January 2016, the lowest growth since November 2013.

  • Month-on-month the quantity bought is estimated to have fallen by 0.3%.

  • The underlying pattern as suggested by the 3 month on 3 month movement decreased by 0.4%; the first fall since December 2013.

  • Average store prices (including fuel) increased by 1.9% on the year, the largest contribution to this increase came from petrol stations, where year-on-year average prices were estimated to have risen by 16.1%.

  • Online sales (excluding fuel) increased by 10.1% year-on-year, but fell on the month by 7.2%; accounting for approximately 14.6% of all retail spending.

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2. Statistician's comment

Commenting on today’s official retail figures, Kate Davies, ONS Senior Statistician said:

"In the three months to January, retail sales saw the first signs of a fall in the underlying trend since December 2013. We have seen falls in month-on-month seasonally adjusted retail sales, both in conventional stores and online, and the evidence suggests that increased prices in fuel and food are significant factors in this slowdown."

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3. Things you need to know about this release

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 1 January 2017 to 28 January 2017. Unless otherwise stated, the estimates in this release are seasonally adjusted.

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 inflation). Unless otherwise stated all estimates included in this release are based on seasonally adjusted data.

The RSI is a key 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 Summary Quality and Methodology Information document.

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4. Main figures

Table 1 shows percentage changes for both the value and volume of sales in January 2017.

While there was year-on-year growth in the quantity bought in January 2017, there was a fall in both the monthly and 3 month on 3 month growth rates. This was the first fall in the 3 month on 3 month series since December 2013.

Looking at the amount spent, there was growth compared with the same period last year and in the 3 month on 3 month series, while there was no growth on the month.

The fall in the quantity bought in the 3 months to January 2017 shows a change in the continued upwards trend experienced in retail sales since December 2013. This coincides with the rise in prices following a period of steady decline. Petrol prices continue to be the main contributor to increased prices; however, food prices have increased on the month in January 2017.

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5. Focus on predominantly food stores

In predominantly food stores in January 2017 compared with January 2016:

  • the quantity bought decreased by 0.2%

  • the amount spent increased by 0.1%

  • average store price increased by 0.2%

Compared with December 2016:

  • the quantity bought decreased by 0.5%

  • the amount spent decreased by 0.6%

  • average store price increased by 0.5%

When comparing with the same month a year earlier, January 2017 was the first decrease in the quantity bought in predominantly food stores since April 2015. This coincides with increases in store prices.

In the early part of the time series the quantity bought was fairly consistent as prices rose steadily. Between early 2013 and 2014, there was more volatility in the quantity bought, which coincided with a rise in prices to the highest level seen in the series. In late 2014, prices started to fall and the quantity bought began to increase, suggesting that consumers bought more as goods in store were cheaper.

In more recent periods, prices in food stores have started to rise gradually, which could have resulted in a fall in the quantity bought. In January 2017, prices increased by 0.5% compared with December 2016, the largest month-on-month rise since April 2013, while the year-on-year increase of 0.2% is the highest since June 2014, consistent with the Consumer Prices Index for January 2017.

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6. Year-on-year contribution

In 2015, for every pound spent in the retail industry:

  • 40 pence was spent in food stores

  • 43 pence in non-food stores

  • 8 pence in non-store retailing

  • 9 pence in petrol stations

Using these as weights, along with the year-on-year growth rates, we can calculate how each sector contributed to the total year-on-year growth in the quantity bought.

In January 2017 compared with January 2016, all main retail sectors except food stores and petrol stations saw an increase in the quantity bought (volume) while all sectors saw an increase in the amount spent (value). The largest contribution in both the quantity bought and amount spent came from non-food stores and non-store retailing.

Table 2 shows the breakdown of these main store types and how average prices changed compared with January 2016.

Table 2 shows that in January 2017, average prices increased by 1.9% compared with January 2016; the largest year-on-year price increase since July 2013. The year-on-year increase in fuel stores is the largest rise since September 2011, contributing to the strong growth seen in the amount spent in fuel stores on the year. However, the quantity bought has decreased following the rise in fuel prices, suggesting that consumers are more cautious with spending in this sector. The decline in growth in the quantity bought for fuel stores may have contributed to the slowest growth seen on the year since November 2013 for all retail sales.

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7. Month-on-month contribution

The monthly picture, as shown in Figure 4, shows that all main retail sectors, except non-food stores saw a decrease in the quantity bought (volume), with the largest downwards contribution coming from non-store retailing. Looking at the amount spent (value), 2 of the 4 main sectors showed decreases, once again, the largest downwards contribution from non-store retailing, while non-food stores saw the largest upwards contribution.

Table 3 shows monthly percentage changes broken down by sector for quantity bought, amount spent and average store price. While prices are expected to fall in January due to sales following the Christmas month, both fuel and predominantly food stores have continued to rise.

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8. What’s the story in online sales?

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain.

Table 4 shows the year-on-year growth rates for total internet sales by sector and the proportion of sales made online in each retail sector.

In January 2017:

  • average weekly spending online was £1.0 billion; an increase of 10.1% compared with January 2016; the smallest year-on-year growth since August 2015

  • the amount spent online accounted for 14.6% of all retail spending, excluding automotive fuel, compared with 13.6% in January 2016

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10. What has changed in this publication?

Economic commentary will be published as part of the short-term indicators theme day on 10 March 2017.

All Retail Sales data is now collected online, this means that all data published in this release has been fully collected online through our online surveys portal.

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11. Quality and 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 document 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

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Contact details for this Statistical bulletin

Rhian Murphy
retail.sales.enquiries@ons.gsi.gov.uk
Telephone: +44 (0)1633 455602