Shoppers buying jewels and gifts for loved ones over Valentine’s Day helped put some sparkle back in UK retail sales last month.
According to the Office for National Statistics (ONS), retail sales volumes rose by 0.8 per cent in February compared with January. This was driven mainly by supermarkets, vehicle fuel and online shopping with non-food retailers such as department stores and clothes shops seeing a fall in sales.
The only exceptions to the non-food demise were furniture sales helped by credit facilities and demand for jewellery and watches for loved ones on Valentine’s Day.
The year-on-year growth rate for retail sales jumped by 1.5 per cent beating expectations of 1.3 per cent. However, the February hike follows two monthly declines in December and January resulting in an overall decrease of 0.4 per cent in the three months to February.
In a retail environment hit by the administrations of Toys R Us and Maplin prices continued to increase during February up by 2.5 per cent. But this was a marked slowdown on the 3.1 per cent rise in December. Internet sales accounted for 17.2 per cent of sales compared with a 15.6 per cent share in February 2017.
“Retail sales did grow in February, with increases seen in food, non-store and fuel, but this followed two months of decline in these sectors,” said Rhian Murphy, ONS Senior Statistician.
“However, the underlying three-month picture is one of falling sales, mainly due to strong declines across all main sectors in December. Store prices continue to rise across all store types, but at a lower rate than the previous month due to a slowdown in price growth, though clothing and household goods stores continued to see stronger price rises.”
Rachel Lund, Head of Retail Insights and Analytics at the British Retail Consortium added: “These figures show that consumers are still feeling the grip of inflation on their spending power. Growth in values and volumes on last year remained weak, compared to recent historical standards.
“Consumers are being careful with their spending, but are not shy of splashing out when the offer is right. The market remains tough for retailers; even with the first glimmers of a return to real wage growth for UK workers this week growth in spending is likely to remain sluggish throughout the coming year.”
There is certainly nervousness around next month’s figures. “The champagne remains on ice for now. The monthly numbers are always volatile, and the underlying trend is still one of weakness,” said Ben Bretell, senior economist at financial services firm Hargreaves Lansdown.
“There’s also a risk of further disappointment in March, with the Beast from the East bringing economic disruption and keeping consumers at home.”
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