UK retail figures disappointing in February

The BRC-KPMG Retail Sales Monitor for February reveals that UK retail sales values were down 0.4% on a like-for-like basis from February 2010, when sales had risen 2.2%. Consumers' underlying uncertainty about jobs and incomes resurfaced, hitting

clothing, footwear and homeware sales.

Internet, mail-order and phone sales growth fell further in February. Sales were 10.4% higher than a year ago, slower growth than the 12.3% in January and the smallest gain since August 2009.

Stephen Robertson, Director General, British Retail Consortium, said: "Apart from a bit of help from half-term for some retailers, February's sales were weak. Other than the negative figures last April (caused by the year-to-year movement of Easter), this February's 1.1 per cent total sales growth is the poorest since May 2009 – even poorer when the impact of the VAT rise on inflation is taken into account.

"After the big boost to January's figures from one-off factors, including a strong final burst of pre-VAT rise spending, February's figures are a return to a more realistic picture of how things are for customers and retailers.

"Even online, the growth in sales of non-food items slowed to an 18-month low. Customers are cautious and cutting back in a big way on non-essential spending.

"Against this background of deteriorating sales, the BRC has written to the Chancellor urging him to use his Budget to support retail's essential contribution to jobs and growth by avoiding new burdens and removing existing ones."

Helen Dickinson, Head of Retail, KPMG, added:"February was a continuation of the trend seen in the latter part of January, with struggling non-food sales highlighting consumers' caution over the outlook. Food performed better than the previous month boosting the overall results slightly but furniture, home and women's clothing all had a poor month. There is inflation in these numbers, so volumes are lower and with people making less shopping trips, fewer retailers are benefitting from the limited spending capacity available. Price, but more importantly value, has become an even higher decision-making criteria. Consumers are re-adjusting their spending habits to reflect the reduced disposable income in their pockets and the key question for retailers is whether they have finished yet."

Image: Retail Sales