Retailers have welcomed unexpectedly strong sales figures, with the fastest increase in three years reported for the three months to February.
Like-for-like sales were up 2.7% compared to February 2012, and 4.4% in total, according to new figures from the British Retail Consortium. But the BRC warned that the government had to do more to help consumer confidence and ensure the recovery lasts.
Food sales growth was slower than other sectors, but still rose 1% on last year. The overall effect of recent food scandals has been neutral, with consumers switching from controversial products like frozen burgers to fresh food.
Analysts suggested the scrutiny of food origins has given food retailers an opportunity to sell more British food. “This is a good opportunity for British producers with more people becoming interested in the origin of their food. Nearly eight in 10 shoppers - 78% - say it’s important whether or not their food comes from Britain, up from 55% who said the same six years ago,” said IGD chief executive Joanne Denney-Finch.
The BRC welcomed the signs of returning confidence, but warned that more needed to be done in the Budget to consolidate the recovery, and emphasised the importance of retail to the future of jobs and growth. “There are certainly highly welcome signs here of gradual improvement and customers feeling a bit more positive,” said Helen Dickinson, BRC director general.
“But it’s too soon to assume this represents the permanent turnaround we need. This month’s Budget gives the government a great opportunity to act to secure real and lasting revival from what could be no more than a short-lived lift. Retail is central to generating the growth and jobs so critical to the UK’s economic recovery, but weak consumer confidence is the real and present obstacle,” she added.
February saw solid sales of canned goods, driven by the cold snap, while vegetables, salads and fresh produce were lifted by interest in healthy eating, according to the BRC. Chinese New Year helped sales of Oriental ready meals and snacks, and the rugby Six Nations tournament increased sales of beers and hot snacks. Shrove Tuesday boosted ready-made pancakes, while Valentine’s Day, as expected, sold lots of chocolate novelties.
In other sectors, growth was driven by strong online sales, up 10.9% on February 2012. Dry weather boosted clothing sales, with more shoppers visiting department stores. Big-ticket household goods and items for the home did particularly well, possibly reflecting better conditions in the housing market. Other strong sectors included health and beauty – boosted by Valentine’s Day – and electricals, with computers and tablets still popular.
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