January sales and heavy price discounting helped retail sales increase 6.6 per cent compared to a year previously, figures out today show.

The British Retail Consortium said the like-for-like improvement was markedly better than the 1.1 per cent national average increase.

It comes as good news for those seeking evidence that all is not doom and gloom in the retail sector. Shoppers keen to take advantage of the slashed prices meant retail footfall was only slightly weaker than in December.

The result is the highest like-for-like increase since August and follows four months of annual declines. Overseas shoppers keen to take advantage of the weak pound helped change the trend.

Helen Dickinson, head of retail at KPMG, warned against excessive optimism, however.

“This appears to be significantly better but the figures don’t mean consumer confidence has returned,” she said.

“The performance in the capital for January, consistent with the rest of the UK, was heavily skewed by a reasonably strong performance in the first week of the month, caused by the continuation of a short-lived pick-up in spending immediately after Christmas, by the level of foreign visitors continuing to take advantage of favourable exchange rates and by extensive discounting and ongoing clearance sales.”

Heavy snow in the first week of February is likely to hit sales further, meaning the pick-up is unlikely to be sustained into the second month of 2009.