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Retail sales growth sees significant fall

Growth in retail sales fell significantly in February while growth of online sales of non-food slowed.

According to the BRC - KPMG Retail Sales Monitor, sales rose by 0.5% from 27 January to 23 February. This compares with a rise of 1.6% a year earlier and a three month average of 0.9% and a 12 month average of 1.2%.

In the three months to February non-food in-store sales dropped by  0.4%, higher than the 12 month average of 0.2%.

Online non-food sales rose by 5.4%, lower than the 6.4% recorded a year earlier.

Helen Dickinson, British Retail Consortium chief executive said uncertainty over Brexit had deterred shoppers.

‘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 12 month average,’ she said.

‘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.’

‘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,’ said Paul Martin, KPMG UK head of retail.

‘Across all categories there was sluggish growth, and the milder weather appears to have shifted the focus away from indoors with furniture sales declining - and not even Valentine’s Day could boost sales in the stationery category.

‘However, the full impact of the recent unseasonably warm weather is yet to be seen, especially for the clothing categories, and online sales growth remained steady. Non-food continues to be under more pressure than grocery, with shoppers focusing on the essentials.’