UK Retail Sales See Strong Growth in January Driven by Health Trends and Wage Increases

Retailers report a 2.6% annual sales increase, bolstered by health-conscious spending and higher household incomes, but concerns about rising costs loom.

• Barclaycard data shows consumer spending rose 1.9% year-on-year in January, the fastest growth since March 2024, with discretionary spending on health and beauty products up 10.7%.
• Social media influencers played a significant role in driving sales of health and wellness products, with 41% of consumers purchasing items linked to popular wellness trends.
• The British Retail Consortium reported a 2.6% year-on-year increase in January retail sales, marking the strongest growth in nearly two years, though it followed a weak festive period.
• Higher wages and disposable income contributed to increased spending, but inflation, forecasted to rise to 3.7% by mid-2025, and upcoming employer cost hikes could offset gains.
• Retailers warn that rising employment taxes and minimum wage increases in April may lead to higher prices, reduced profits, and potential job cuts across the sector.

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