UK retail sales fall 0.3 per cent in February

Katie Roberts

By Katie Roberts

March 6th 2012 at 11:02AM
UK retail sales fall 0.3 per cent in February

BRC says that a sales revival 'remains illusory' as sales continue to be weak.

Like-for-like sales for the month were down by 0.3 per cent, compared to February 2011, when they fell 0.4 per cent.

On a total basis, sales rose by 2.3 per cent, against a 1.1 per cent increase a year before.

Figures for leisure goods sales showed that "toy sales were mixed, amid tough competition".

Stephen Robertson, director general, BRC, commented: "The reality of weak sales shows that a convincing revival remains illusory.

“Falling inflation has eased the squeeze on household finances and halted the slide in consumer confidence but that’s at risk from fuel price rises and Budget uncertainty. Unemployment is expected to rise further causing increased nervousness about job security, which is keeping confidence fragile.  Any sense of improving optimism is not yet translating into more spending.
 
“Total sales growth is still below inflation, so overall customers are actually buying less than a year ago, while discounts are eating into margins. Food picked up but non-food sales deteriorated with goods affected by the slow housing market among those particularly struggling.
 
“In this climate of continued caution, the Chancellor must use the Budget to hold back business costs, which will support jobs, growth and the much-needed consumer turnaround.”  

Non food non-store sales growth slowed considerably during February, having picked up in December. Sales were up 9.9 per cent year-on-year, down from 11.3 per cent in January and 18.5 per cent in December.

Helen Dickinson, head of retail, KPMG, said: “February’s results were similar to January’s but with very different dynamics. Food performed better than in the previous month but many non-food sectors struggled. The timing of half term caused plenty of variability during February and swings in performance by individual retailers makes business planning all the more challenging.

“Consumers remain reluctant to spend unless encouraged by promotional activity. Thus, while the market is still growing slightly in headline sales terms, profitability continues to be eroded through loss of margins.
 
“Many retailers feel they’re fighting very hard just to stand still at best and don’t see any light at the end of the tunnel. However, there are retailers out there who deliver what the customer wants and needs – in terms of product, brand and price – which proves that if the proposition is spot on it is still possible to outperform the market and the competition.”