Retail sales volumes rose 1.8 per cent month on month in January, offering a modest lift after a subdued end to 2025.

However, the detail in this morning’s figures from the Office for National Statistics (ONS) underlines the intensifying competitive pressure facing food retailers.

According to the ONS, total retail sales volumes increased by 0.1 per cent in the three months to January 2026 compared with the previous three-month period, and were 4.5 per cent higher year on year.

However, the gains were unevenly distributed across the market.

While non-food categories such as artwork and antiques, household goods and online jewellery enjoyed a strong start to the year, supermarkets delivered only modest growth over the latest three-month period.

Food holds relatively steady, but momentum lags

Food store volumes declined 0.2 per cent over the three months to January and increased by 1.2 per cent month on month.

In isolation, that points to a solid January bounce. But in a month where overall retail volumes jumped 1.8 per cent, grocery’s relative underperformance is notable.

The ONS said the broader uplift was driven in part by a rebound in automotive fuel and a “good start to the year for non-food stores”, only partly offset by falls in supermarkets and department stores over the rolling three-month measure.

For grocers, the data reinforces a pattern seen throughout 2025. Steady, but unspectacular volume growth in a market where consumers are spending carefully and shopping with intent.

Nicholas Found, head of commercial content at Retail Economics, described January as a “reset in spending”, with consumers prioritising wellness, jewellery and practical home upgrades.

“Although overall volume growth still leaves much to be desired, it tells us demand has become more intentional,” he said. “For now, retail remains a market where value wins, but volumes lag.”

That dynamic is particularly acute in food, where price perception and own-label strategy are central to share gains.

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Online growth masks channel recalibration

Online spending values rose 1.3 per cent month on month and 14.7 per cent year on year in January, the strongest annual increase since April 2021.

Over the three months to January, online sales were up 10.8 per cent compared with the same period a year earlier.

Yet the proportion of total retail sales made online edged down slightly, from 28.3 per cent in December to 28.2 per cent in January, as in-store spending also rose.

The ONS noted that January saw above-average rainfall, while retail footfall declined compared with the previous year. That likely supported online grocery demand, particularly in the early weeks of the month when consumers traditionally rein in discretionary trips.

For grocers operating both bricks-and-mortar and online models, the figures underline the continued importance of channel balance. Consumers are not abandoning stores, but they are deliberately choosing when and how to shop.

Melissa Minkow, global director of retail strategy and insights at CI&T, said the uplift reflects “a more deliberate UK shopper”.

“With over half of UK consumers more focused on value than a year ago, purchases are increasingly timed around clear value moments rather than impulse,” she said.

“Discounting and loyalty mechanics helped unlock demand, but this isn’t just a promotions story.”

That has clear implications for grocery, where loyalty schemes, price-matching initiatives and personalised offers are now central to driving frequency and basket size.

Inflation easing, but pressure persists

January’s retail data comes soon after the news that inflation is easing, which fell to 3.0 per cent during the month.

While that has revived speculation of a potential spring interest rate cut from the Bank of England, consumer confidence remains fragile.

Alice Cowley, managing director in Accenture’s retail practice, said the 1.8 per cent monthly uplift would bring “some much-needed relief” after a challenging end to the year.

“Total consumer spend remained below inflation, and shoppers continue to scrutinise non-essential purchases while leaning into trusted brands and own-label value,” she said.

What it means for grocers

For supermarket operators, January’s figures offer cautious encouragement rather than a turning point.

Volume growth in food remains positive, but slower than in more buoyant non-food categories. The competitive battleground continues to centre on value, not just price but clarity, loyalty rewards and perceived fairness.

As Minkow noted, consumers are planning more carefully, using digital tools and AI-led search to compare and control spending. For grocers, that increases the importance of accurate pricing, strong digital discoverability and data-driven promotions.

With households still spending “carefully rather than freely”, according to Retail Economics, 2026 is shaping up to be another year defined by market-share battles rather than broad-based recovery.