Retail sales fell in January

UK retail sales fell unexpectedly in January, confounding economists' expectations for a rise.

Volumes fell 0.6% from December 2012, hurt by heavy snowfall, the Office for National Statistics (ONS) said.

Volumes also fell 0.6% from a year ago, the first annual fall in 17 months.

The ONS highlighted weak sales in the food sector, which dropped 2.6% year-on-year to the lowest level since April 2004. It also said small stores had fared worse than large stores.

Smaller retailers in the food sector suggested that the heavy snow seen in the second half of January had affected sales.

In contrast, larger retailers suggested that some of the increase they saw came from a rise in online sales.

The amount spent online accounted for 10.1% of all retail spending, excluding fuel.

In the food sector, the proportion of online sales rose 27% on the year. That meant that online sales now make up a record 3.7% of all food sales.

The data for December, which had previously shown a 0.1% drop in monthly volumes, was also revised to show a steeper 0.3% decline.

By value, retail sales fell by 0.4% on the month and were unchanged on the year.

The ONS said that sales at petrol stations were the biggest contributor to the drop in the amount spent.

The retail data raises concerns about the strength of the UK economy, which shrank by 0.3% in the fourth quarter of 2012.

Some analysts had already feared that it could contract again in the first quarter of 2013, which would mean the UK would slip back into recession.