Retail sales growth in the UK underwhelmed last month, marking something of a comedown following a stellar start to the New Year according to a well-regarded monitor.
Retail sales edged up just 0.1 per cent on a like-for-like basis in February compared to the same month last year, a significant slowdown from the 2.6 per cent jump recorded in January, according to the latest sales monitor from the British Retail Consortium (BRC) and KPMG.
While shoppers might be expected to tighten their belts following the January sales and the excesses of the festive season, February’s reading was weaker than the 0.5 per cent growth expected by economists. In February 2015, sales growth had been a slightly better 0.2 per cent.
Sales in January jumped following a relatively disappointing Christmas for UK retailers, as Britons took advantage of the January sales. Furniture sales were particularly strong at the start of the year.
Helen Dickinson, chief executive of the BRC, said retailers reported a slowdown in February across almost all categories of products. Stationary, plus health and beauty, were among the few exceptions as sales of these products were helped by Valentine’s Day.
Ms Dickinson said:
This slow growth reflects the increasing pressure the industry is under, as highlighted in our recent Retail 2020 report. With the Budget due this month, we encourage the Government to address the cumulative burden that retailers face; enabling growth and protecting jobs and communities.
David McCorquodale, UK head of retail at KPMG, pointed out that retailers will come under added pressure from next month, when the new higher living wage for over 25-year-olds comes into force. He said:
With the implementation of the National Living Wage only weeks away, all the focus is on promotional activity to drive sales and on productivity to protect margins. With fashion design choices made and an early Easter this year, clothing retailers will be hoping for March sunshine to launch the new season’s wares.
Total sales rose 1.1 per cent in February, year on year, following 3.3 per cent growth in January.
Total sales take into account sales from new stores while like-for-like sales indicate how stores that have been open more than a year are faring.