Food sales received a Valentine’s Day boost in February, but growth remained muted and volumes declined, according to new data released this morning.
The latest retail sales monitor from the BRC and KPMG showed that total retail sales increased 1.1% in the four weeks to 1 March, which compared with the same number a year ago.
Sales rose 2.3% for food retailers in February, a significant slowdown versus 5.6% growth in the same month a year ago. It was also behind January’s 2.8% climb.
Helen Dickinson, CEO of the British Retail Consortium, said the weak performance across retail made many in the sector “uneasy”, especially as they prepared to take on an additional £7bn of new costs stemming from autumn’s budget.
“The industry is already doing all it can to absorb existing costs, but they will be left with little choice but to increase prices or reduce investment in jobs and shops, or both,” she added.
Sarah Bradbury of the IGD highlighted that despite the upcoming cost challenges, shopper confidence rose last month (it was up to ‘2’ versus ‘-3’ in January, according to the IGD’s index) thanks to wage growth and the impending rise in the national living wage.
“Early February saw positive retail value sales, likely from Valentine’s promotions, but overall, February’s volume sales dipped,” she said.
“Shopper confidence is expected to remain volatile in response to the external environment.”
Linda Ellett, UK head of consumer, retail & leisure at KPMG, added that consumers remained cautious with their spending, with many prioritising saving, travel and experiences.
“Nervousness about the economy is deferring other big ticket purchasing, but occasions and offers are still tempting shoppers into some impulsive spending,” she said. “Valentine’s, for example, brought a jewellery sales boost to the high street, in what was otherwise a flat month for in-store buying.”
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