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Brexit uncertainty hits February’s retail growth

By Danielle Wightman-Stone


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The British Retail Consortium has stated that “uncertainty” surrounding Brexit has hit retail growth for February.

On a total basis, sales increased by 0.5 percent in February, against an increase of 1.6 percent in February 2018. This was below both the 3-month and 12-month averages of 0.9 percent and 1.2 percent respectively, and centres around shoppers being reluctant to spend while Brexit looms.

Helen Dickinson, chief executive of the British Retail Consortium, said in a statement: “Uncertainty surrounding the UK’s imminent exit from the European Union has hit consumer spending. While real incomes have started to rise over the past year, shoppers have been reluctant to spend this February, holding back growth. This slowdown was not limited to physical stores, with growth in online non-food sales well below the twelve month average.

“With consumers increasingly aware of the risk of a no deal Brexit, it is likely that uncertainty has driven this cautious approach to retail spending. If government wishes to reassure both the public and businesses, they should ensure a chaotic no deal – which would lead to higher costs, higher prices, and less choice for consumers – is taken off the table with immediate effect.”

Over the three months to February, in-store sales of non-food items declined by 2.8 percent on a total basis and down by 3.1 percent on a like-for-like basis. This is below the 12-month total average decline of 2.4 percent.

While online sales of non-food products grew 5.4 percent in February, against a growth of 6.4 percent in February 2018. This is below the 3-month average of 5.6 percent and pulls down the 12-month average to 6.9 percent.

Paul Martin, UK head of retail at KPMG, added: “Following a modest recovery in January, February saw a slowdown in sales. While consumer spending has so far remained relatively resilient, driven by factors such as low unemployment and wage growth, it would seem that continuing political and economic uncertainties are beginning to notably affect shoppers’ spending habits.

“Across all categories there was sluggish growth…non-food continues to be under more pressure than grocery, with shoppers focusing on the essentials. To manage these dynamics, retailers have to continue managing cost and margin and carefully assess how to gain market share in a broadly flat market.”

British Retail Consortium