Like-for-like retail sales figures rose 1.1 per cent in January, the biggest increase since May, although the outlook remains 'challenging'.

The BRC-KPMG Retail Sales Monitor found total sales increased 3.2 per cent in January.

Food sales showed strong growth, up 5.1 per cent on a like for like basis. Non-food sales slipped 1.6 per cent.

Sales were driven by “widespread heavy discounting” in clearance Sales, the BRC reported. Despite the promotions, clothing, footwear, homewares and health and beauty sales remained down on last year.

January began well, but growth slowed towards the end as clearance Sales were wound down. The BRC said many purchases were replacements and essentials rather than discretionary extras.

Non-food non-store sales rocketed 19.2 per cent, which was weaker than the 30 per cent rise recorded in December

BRC director general Stephen Robertson said: “These surprisingly good figures give some room for optimism. Overall sales growth turned positive and is higher than it's been since last May.

"Food sales growth rose. Non-food sales fell more slowly, suggesting January clearance deals released pent-up demand and customers started to spend on goods they’ve been intending to buy for months.

“But the fundamentals haven't changed. Job fears are mounting. Consumer confidence is at record lows. It remains to be seen whether January’s discount driven growth was just a blip.”

KPMG head of retail Helen Dickinson said: "Following three months' year-on-year declines in the total value of retail sales and seven months of declines in like-for-like sales, this appears to be significantly better but the figures don’t mean consumer confidence has returned.

"The divergence in the non-food sectors between those that are doing well and those that are not, continues to grow, meaning the outlook for many retailers, and the industry as a whole, remains challenging."