World Economy

UK Retail Sales Soften in February, Tougher Times Expected

UK retailers say they may be in for a tough year.UK retailers say they may be in for a tough year.

UK retail sales softened in February as consumers adopted a more cautious approach, with non-food sales bearing the brunt of the reduction in spending, according to the results of a widely-followed survey.

Total retail sales rose by 0.4% year-on-year in February, down from a 1.1% rise in the same month one year ago and below the three-month average of 0.8% and the 12-month average increase of 0.9%, according to the British Retail Consortium, Digitallook reported.

On a like-for-like basis, retail sales slipped 0.4% during the same month, down from a 0.1% rise in the preceding year.

In terms of quarterly rates of change, like-for-like food sales advanced 0.6% and 2% on a total basis, taking the annualized rate for total average spend to 1.2%—the highest since May 2014.

Nonetheless, LFL non-food spend decreased 0.4% on a quarterly basis and by 0.2% in total terms—the first three-month fall since November 2011.

BRC chief Helen Dickinson said the later timing of Mother’s Day this year had negatively distorted February’s data for some categories, such as women’s accessories and, health and beauty.

Yet Dickinson conceded that “looking beyond this distortion, the persistent weak sales performance of several non-food categories points to an undeniable trend of cautious spending on non-essential items.

“Tougher times are expected ahead. The impact of inflation on consumer spending will add further intensity to an already fiercely competitive environment in which the ability to adapt and innovate will be key to survival.

“Looking to the budget this week, we hope to see a commitment from government to lay a path to a truly sustainable business rates system that will give retailers the flexibility needed to invest and support their local communities.”

UK retailers offered further evidence on Tuesday that they may be in for a tough year, while new data also showed the housing market is facing a slowdown.

The Bank of England upgraded its most recent economic growth forecast but inflation picked up to 1.8% in January, from 1.6%, and is forecast to push close to 3% by year end, which will eat into real income growth.

Add new comment

Read our comment policy before posting your viewpoints