Report Summary

Period covered: 4 – 31 January 2026

3 minute read

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.

Online performance

Online retail delivered an exceptional start to 2026. Sales surged xx% year-on-year in January (value, non-seasonally adjusted), reversing a xx% decline recorded in the same month last year.

The scale of the rebound marks the strongest annual increase since 2021 and significantly outpaced total retail growth.

Average weekly online sales reached £xxm, compared with £xxm a year earlier, while online accounted for xx% of overall retail sales, up from 26.8% last January.

Key drivers

January’s performance was driven by a combination of clearance intensity, adverse weather and a consumer preference for convenience, layered onto an improving but still cautious economic backdrop.

Post-Christmas discounting played a central role. Many shoppers deliberately postponed discretionary purchases in December, anticipating deeper markdowns in the New Year. Online channels amplified promotional visibility through targeted email campaigns, app notifications and paid search.

Clearance activity was particularly powerful in fashion, electricals and selected home categories, where ticket sizes are large enough for discounts to meaningfully influence timing.

Severe weather further supported the digital shift, with January ranking among the wettest on record in parts of the UK, with multiple named storms disrupting transport networks.

Cold, dark conditions also redirected discretionary spend towards in-home consumption. Spending on digital content and subscriptions rose 9.3% year-on-year, and over a third of consumers reported watching more films and television during the month. This behavioural shift supported online grocery, small domestic upgrades and health-related purchases.

Macroeconomic backdrop

Headline CPI eased to xx%, the lowest rate in nearly a year, reducing immediate pressure on household budgets. Food inflation eased but remained elevated, with consumers opting to shift to own-brand labels at record pace.

Consumer confidence edged up to xx. Households reported greater optimism about their personal financial outlook, even as views on the wider economy remained subdued.

Interest rates were held at xx%, and financial markets increasingly expect gradual easing during 2026. While borrowing costs remain elevated, the direction of travel has improved sentiment around larger-ticket purchases.

Mortgage rates have stabilised and early signs of housing market firming, including MoM house price growth and a return to positive YoY growth, have

supported household budget stability.

Labour market conditions softened, with unemployment moving higher and vacancies stabilising at lower levels than a year ago.

At the same time, easing inflation and steady income growth reduce the risk of renewed contraction in discretionary demand.

For online retail, the macro picture translates into cautious engagement. Consumers are willing to purchase when value is evident, particularly through digital channels that maximise transparency and convenience.

Outlook

January’s surge establishes a strong opening position for the online channel in 2026. As promotional intensity moderates through February, online growth rates are likely to normalise. Underlying demand remains present, yet consumers continue to prioritise value.

The key test through the first quarter will be whether growth can be sustained with firmer pricing discipline as weather conditions stabilise and promotional activity eases.

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Proportion of online retail sales by category (Period aligned to ONS trading calendar – 4 – 31 January 2026)