Shoppers inspired by health food trends on social media helped lift retail sales in January, easing pressure on high-street stores after a gloomy festive period.
Barclays said credit and debit card spending grew 1.9% year on year in January – the highest upsurge since March 2024.
The turnaround came after a 10.7% rise in discretionary spending on health and beauty products – the strongest growth rate for the sector in more than three years – which the bank said was because of the increasing sway gained by influencers over what consumers choose to buy.
While trading for most retailers remained tough, popular health trends, given a boost by the recommendations of social media stars, have proved to be a driving force behind online and brick-and-mortar sales. One in five consumers (19%) said they had recently been influenced by social media content to make a health or beauty purchase, rising to 40% for gen Z, the bank said.
An even higher proportion – two-fifths – of consumers (41%) said they had recently bought products or services in response to popular wellness trends.
Food supplements, vitamins and high-protein food ranges were among the trends on social media that most commonly translated into higher sales.
Cinemas and entertainment venues also put in a strong performance, up 8.1% year on year in January, said the bank. Cinema revenues alone rose 15.1% as family friendly films Mufasa: The Lion King and Sonic the Hedgehog 3 lured in viewers, Barclays said.
A separate survey by the British Retail Consortium (BRC) found that sales of food and non-food increased in January, although the lobby group said the better sales at the start of the year failed to reverse a poor run for retailers during the “golden quarter” from October to December.
Businesses have complained that uncertainty about the economy, high interest rates and fears of further rises in prices have dampened consumer spending and hit profits.
Profits are expected to take another knock in April when higher employment taxes announced in Rachel Reeves’s October budget and a rise in the minimum wage take effect. Marks & Spencer was the most recent retailer to argue that the sector would be badly affected by the extra costs hitting employers. The sector has warned that the higher costs could lead to job losses and higher prices.
The BRC said there was a return to more normal trading in the three months to January, but cautioned it could be short-lived.
Total retail sales increased by 2.6% year on year in January, against a growth rate of 1.2% in January 2024. Last month the BRC said sales rose by just 0.4% in the three months to December on the same period in the previous year.
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The sales of computers, phones and other household items jumped in January, turning around a 2.8% annual decline last January in non-food purchases into a 2.5% annual gain last month.
Food shops also made gains, pushing up sales by 2.8% over the last year, although this marked a slowdown from a 6.1% annual rise to January 2024.
Barclays said its measure of essential spending showed a modest 0.1% increase in January, although this reversed four consecutive months of decline.
Jack Meaning, the chief UK economist at Barclays, said the likelihood of lower interest rates this year would bolster consumer spending. But a forecast by the Bank of England that inflation will reach a fresh peak of 3.7% by the autumn was likely to have the opposite effect.
“We expect bank rate to fall to 3.5% [from 4.5% now] before the end of the year, which should give a further boost to consumers who will once again feel the pinch as inflation rises in the coming months, albeit it temporarily.”
