UK: Sales slow in February after bumper January

03/17/2014

UK retail sales were down 1.0 percent on a like-for-like basis from February 2013, when they had increased 2.7 percent on the preceding year. On a total basis, sales were up 0.7 percent , against a 4.4 percent increase in February 2013.

The 3-month average total growth was 2.8 percent , in line with the 12-month trend, now at 2.7 percent . Home Accessories was the top performing category, followed by Furniture and Flooring which was the greatest contributor to overall growth.

Online sales of non-food products in the UK grew 14.3 percent in February versus a year earlier. The online penetration rate achieved 17.5 percent in February.

Helen Dickinson, Director General, British Retail Consortium, said: "Our sales figures for February show a slower pace of growth in the retail industry than in previous months, underlining that the consumer-led recovery is still developing.

"However, this slower growth might have been expected in some ways, given the record sales figures we saw in January and the strong results that we are comparing against from last year. If they were taken together, the figures from the last three months show a 2.8 per cent average growth in the retail industry, a modest increase on the 12 month average.

"Once again, furniture and home accessories were the best performing categories. This further illustrates the impact of the continued recovery in the housing market on the wider economy. On the other hand, Food sales continued to stay relatively flat.

"Overall, these figures reflect the considerable challenges still faced by consumers and retailers in the UK. It remains to be seen how the industry will fare over 2014."

David McCorquodale, Head of Retail, KPMG, said: "February saw a hiatus on the high street, with online sales soaring while in store sales stalled. There's no doubt inclement weather exacerbated this trend, but it certainly underscores the importance of having a sophisticated online operation.

"The grocery sector remains fiercely competitive. February's figures were impacted by the discounting campaigns launched by the value grocers, which caused a sharp slowdown of overall price inflation in the food sector.

"There were some bright spots amidst the gloom. The effects of a rapidly recovering housing market are already feeding through to the retail sector, with sales of furniture and home accessories remaining solid.

"However overall sales were pretty flat, which serves as a reminder that recovery is far from certain. Retailers need the Government to deliver measures in the forthcoming Budget which will give shoppers more pounds in their pocket, but more importantly imbue them with the confidence to spend them."

Source: BRC