ONS Retail Sales January 2023 Findings: What They Mean

ONS Retail Sales January 2023

The ONS Retail Sales January 2023 data has revealed ongoing trends, as well as highlighting challenges that retailers are likely to face. In this article, we outline the key findings, as well as gathering experts’ insights to help retailers to use these trends to their advantage.

Key findings from the January ONS Retail Sales January 2023 figures

  • Retail sales have increased by 0.5% in January 2023, following a fall of 1.2% in December 2022
  • Non-store retailing, mainly online retailers’ sales volumes grew by 2% in January 2023, with feedback suggesting that January sales promotions played a key role
  • Non-food stores’ sales volumes rose by 0.6% over January
  • 25% of retail sales were made online, a significant increase in comparison to pre-COVID levels of 19.5% in February 2020

How can retailers utilise the ONS Retail Sales January 2023 figures?

We spoke with industry experts to get their insights and advice to help retailers overcome any challenges and thrive, using the ONS Retail Sales January 2023 to their advantage. 

Avoid wastage and understand buying behaviours

Philip Hall, Managing Director, Europe at CommerceHub said: “It’s been a challenging start to the year for many retailers and brands. Consumer confidence has taken a hit, and the low discretionary spending reflects the fact that consumers are battening down the hatches in response to the economic storm overhead.  

“With the uncertainty set to continue for the foreseeable, brands and retailers are focused on profitability over everything else. Ecommerce will be a big focus of conversation for those looking for ways to adapt quickly to shifting demand patterns, maintain profitability and meet consumers where they shop.

“As every penny counts, consumers are more price-conscious than ever, with some looking in-store, then checking prices online before making a decision. Retailers and brands are also assessing every channel’s performance and honing their marketing strategies to avoid any wastage.

“Any bets taken in the next few months will need to be carefully calculated as the margins are so fine. Retailers are leaning into unowned inventory to meet customer needs more profitably, and one option that brands are exploring is consolidating stock pools. This minimises risk as if one retailer sells out of a product, then the brand can shift over any excess stock to ensure the customer can still make the purchase.”

Offer an experience that builds brand loyalty

Nick Delis, Senior VP of International and Strategic Business at Five9 said: “Though sales saw an unexpected 0.5% rise in January, volumes are still significantly lower than last year – as cutbacks on spending have been intensified by persistent inflation and the cost-of-living crisis.

“Consumers will remain selective about how they spend their money, so brands must show customers value, while ensuring strategies are sustainable in the long run. In an increasingly digital world, where instantaneous service is now a minimum expectation, brands would be wise to ensure their customer communication is consistent and streamlined. Retailers will better meet consumers’ expectations in this rocky economic climate by ensuring processes are simple and accessible, and proactively informing customers when needed. Brands should have clear points of contact available when issues arise, and make cross-channel transitions from SMS to a live representative easy.

“The second a customer does not trust a brand, there is no going back. Retailers need to offer communication and understanding in times of crisis, as well as practical ways to help customers, such as loyalty programmes. After all, it only takes one bad experience to lose a customer. By intelligently managing the customer experience with the right communication strategy, retailers can safeguard their brand promise and maintain the necessary loyalty as they weather the storm for the months to come.”

Accurate forecasting and personalised experiences

Geoff Lloyd, Director of Retail at NTT DATA UK&I, said: “Non-food retail sales increased slightly in January while grocery sales saw a dip as consumers limited their spending post-Christmas and amid the cost-of-living crisis. With sales expected to fluctuate throughout 2023 and sales to remain below pre-COVID levels, it’s imperative that retailers across all sub-sectors reassess their current strategies to ensure they have the strongest plan in place for the year ahead to not only survive but thrive. To protect profits as much as possible, digitalisation strategies that focus on doing more with less, improving customer and user experiences, and provide accurate forecasting, will be key.  

“For clothing retailers, this means providing a shopping experience that blends seamlessly with what shoppers experience online. Consumers have become accustomed to advanced technologies via online channels, but now expect to have advanced digital systems in-store to personalise and improve their experience. For grocery retailers, this means personalising loyalty schemes and making quality food accessible to shoppers, as much as possible. In addition, grocery retailers should have the right forecasting programmes in place in order to prepare ahead of time for upcoming events they can cash in on throughout 2023, like the King’s Coronation, Wimbledon, and the Rugby World Cup. 

“With this in mind, data management and intelligence, with real-time insights will be critical for retailers to continue to be competitive in an evolving retail market. The cost of products will continue to remain an important factor for consumers when deciding where to shop but, with consumer preferences changing and as more shoppers look for immersive technology options as part of their in-store shopping experience, it’s critical for retailers to use insights to enable hyper-personalisation and trend forecasting.”

Read the ONS Retail Sales January 2023 report

Click here to read the ONS Retail Sales January 2023 overview, seeing a more comprehensive list of findings across the retail sector.