–Jan Retail Sales +0.9% m/m; +2.0% y/y; median -0.4% m/m; +0.4% y/y
–Jan Retail Sales ex auto fuel +1.2% m/m; +1.9% y/y; median -0.4; 0.0

LONDON (MNI) – Retail sales posted the strongest monthly increase
for nine months in January, suggesting the sector is performing well in
spite of gloomy survey data and negative media reports.

Figures released by National Statistics showed total retail sales
jumped 0.9% on the month and were up 2% on the year, confounding
expectations for a fall of 0.4% on the month and rise of 0.4% on the
year.

The figures add to other recent economic data which suggests the
economy made a decent start to Q1 in contrast to some gloomy forecasts.
While the data can be erratic these figures are likely to increase
expectations that we may well have seen the last bout of QE from the
Bank of England.

Moreover, on a trend basis, in the three months to January volumes
were up 1.3% compared with the previous three months, the highest growth
since August 2009.

Excluding auto fuel, which gives a better guide to underlying sales
on the High Street, rose an even stronger 1.2% on the month and was up
1.9% on the year. Again this was way above the median for a fall of 0.4%
on the month and an unchanged outturn on the year.

National Statistics said that there was no evidence that
discounting in January was stronger than usual. A spokesman, however,
did say that recent growth had been strongest among small to medium
sized retailers. This could go some way to explain why the survey
evidence from the BRC and CBI has been far more gloomy as their members
tend to be larger retailers.

Growth in January was driven by predominantly non-food stores sales
volumes, which rose 2.2% on the month. Food store sales were down 0.3%
on the month.

Within, non-food there was very strong growth in other stores
sales, with volumes up 5.9% on the month, helped by sales of sporting
equipment. Household goods sales rose 4.8% on the month, boosted by
furniture sales, and posted the first positive annual growth since
January 2010 of 1.3%.

Department stores sales also posted a respectable 0.6% monthly
rise. Only one category within non-food fell, which was clothing and
footwear stores which saw volumes drop 2.1% on the month.

Non-store retailing and repair, which includes specialist internet
stores, rose 3.9% on the month, with sales now up 13.3% on the year.

The retail sales deflator excluding auto fuel remained steady at
1.8% in January.

–London bureau: 0044 20 7862 7491; email: drobinson@marketnews.com

[TOPICS: MT$$$$,M$B$$$,MABDS$]