Positive January retail sales mask negative underlying trends

Positive January retail sales mask negative underlying trends

  • Total like-for-like sales climbed by +10.9% compared to January 2022
  • The fashion sector drove growth with total LFLs climbing +20.1% 
  • Although positive, sales remain only marginally above inflation while consumer confidence continues to fall
  • Online sales rose just +4.1% from a negative base in January 2022

Strong like-for-like (LFL) sales throughout the month carried January to the best monthly result since July 2022, and marked the twenty-third consecutive month of positive total LFL sales, according to new data revealed by accountancy and business advisory firm BDO LLP. 

However, while the overall figures were positive, they were only slightly above the UK’s high inflation rate, with Brits still spending less on non-essentials due to the rising cost of living and the increasing gap between wages and inflation.  

According to BDO’s High Street Sales Tracker (HSST), total LFL sales, combined in-store and online, grew by +10.9% in January. Total in-store LFLs jumped by an impressive +19.5% in the month, from a strong base in January 2022, when results were comparing to figures from the 2021 lockdown. However, it was a disappointing month for online sales, with total non-store LFLs rising by just +4.1% from a negative base of -2.7% for January last year.   

2023 got off to a good start, with LFLs jumping +14.62% in the first week of the month and a jump of +13.67% in week two from a strong base and in the third week of the month, total LFLs grew by +12.79%. The final two weeks saw total LFL sales climb again by +11.96% and +10.20% respectively. However, despite these positive results, online sales fell to their lowest figure since October 2020, growing a mere +0.31%. 

Sector Results

The fashion sector drove overall figures this month, with total LFLs climbing an impressive +20.1%. These figures mark the twenty-third consecutive positive month for total LFLs for the sector. In-store LFLs saw particularly strong performance, jumping by +26.1%, the category’s strongest result since July 2022.

January saw total LFL sales in the lifestyle category grow by +7.6%, its second consecutive month of positive LFL results, and the sector’s second highest LFL sales since July 2022. In-store LFLs also remained positive throughout the month, growing by +16.7%. 

But it wasn’t all positive throughout January. Total LFLs for the homeware sector fell by -5.4% with a particularly poor performance in online sales. However, despite these negative figures, in-store homeware LFLs saw a marginally better result, rising by +2.1% in the month, compared to January 2022. 

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: 

“Although these results look positive at first glance, they are masking a very different picture, with our +10.9% figure for total LFLs only slightly higher than the 10.5% inflation rate. What we can see is that perhaps many consumers postponed December spending in order to wait for the January sales to try and bag a bargain and make their money go further. 

“There is a positive given the strong in-store figures pointing to the return of the high street.  This perhaps demonstrates also that each purchase of non-discretionary spend is more considered given the tighter consumer purse resulting in people wanting to see the item before committing. As the gap between consumer wages and inflation continues to grow, and essential spend takes a greater share of the purse, consumers are far more selective, and retailers will be having to work harder to differentiate their offering through product and value.  

“With inflation impacting costs across all sectors, including food in particular, we are expecting to see discretionary spending fall across the year as consumers prioritise essential spending. Given the expected downturn in discretionary spend, retailers will therefore be focused on managing working capital and inventory levels, all within an inflationary environment.”


Note to editors

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world. 

The organisations we work with are Britain’s economic engine –entrepreneurially-spirited, high-growth businesses that fuel the economy.  

We understand the ambitions and entrepreneurial mindset of those we work with and have the global reach, integrity and expertise to help people and businesses succeed.  

BDO LLP operates in 18 offices across the UK, employing 7000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 164 countries, with 95,000 people working out of 1,713 offices worldwide. It has revenues of $11.8bn.  


Fergus Lynch or Ellie Tudor 
Tel: +44 (0)7880 657 494
Email: BDO@hellolaunch.co.uk