Retailers judged sales volumes for January as poor for the time of year. Credit: Robin Busscher/Shutterstock.

The UK’s retail sector witnessed an accelerated decrease in annual sales volumes in January 2025 – the fourth consecutive month of decline, according to the Confederation of British Industry’s latest Distributive Trades Survey. 

The weighted balance of year-on-year retail sales volumes plummeted from a 15% drop in December to a 24% fall.  

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Retailers judged the sales volumes for January as poor for the time of year, mirroring the sentiment of the previous three months.

Expectations for February suggest sales will drop even further below seasonal norms at 31%. 

The pace of decline in internet retail sales volumes intensified in the year to January, dropping to 22% from an 8% decrease in December. A sharp fall is expected in the following month at 46%. 

CBI principal economist Martin Sartorius said: “The retail sector saw a further deepening of the recent sales downturn in January. Retailers cited weak demand and downbeat sentiment as continuing strains on business conditions. 

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“The combination of a faster fall in retail sales volumes and firm declines in wholesale and motor trades resulted in the total distribution sector seeing the sharpest annual sales drop in a year. Looking ahead, retailers, wholesalers and motor traders expect the sales slump to continue into next month.” 

Total distribution annual sales volumes, encompassing retail, wholesale and motor trades, suffered the steepest yearly fall in January 2024, deteriorating from 30% in December to 32%.  

The survey data also indicated that orders placed upon suppliers plummeted 43% in January from a 26% dip in December. Retailers anticipate a more moderate reduction of 25% in February. 

Retail stock volumes remained high relative to expected demand in January at 26%, up from 13% in December.  

Sartorius added: “With recent growth figures showing the urgent need to inject momentum into the economy, the government should look at policy levers that would help shore up confidence across key sectors, including retail. 

“As firms brace for an April costs hike due to [October 2024] Budget measures coming into force, it is crucial to press ahead with reforms to the unfair business rates system and deliver much-needed flexibility to the Apprenticeship Levy.”