UK Retail Sales Tumble in January as Bad Weather Takes Toll

UK retail sales plunged in January, falling well below expectations as bad weather took its toll on stores across the country.

Office for National Statistics data shows that the volume of sales in the retail sector slumped by 0.6 percent on the same month a year before, when most economists were expecting an increase.

Across the month, sales fell by 0.6 percent on December. Snowfall and wet weather swept across Britain in January, causing travel problems and store closures.

Falling food sales were the heaviest drag on the headline figure, dropping by 2.6 percent on January 2012 and tumbling to their lowest level in nine years.

Internet sales continued to grow, however, with online shopping up 8.7 percent on the year before. Average weekly spend online in the retail sector was £546.5m.

Retailers have suffered a difficult few months with sticky inflation and stagnant wage growth keeping consumers off the high street.

Several big names have gone under, including video rental store Blockbuster, digital photography chain Jessops, and the latest casualty Republic, a clothing outlet.

Britain's economy is driven by its service sector, which accounts for around three quarters of its output. Retail is a significant part of the service sector and the drop in sales will be felt across the economy.

It is the first disappointing data release from the UK economy in the first quarter, which has showed signs that it will return to marginal growth after contracting in the final three months of 2012.

An unprecedented triple-dip recession looms in the distance, but most economists think the UK will narrowly escape a third slump before it finally recovers from the financial crisis.