Sales on the high street during February proved to be the weakest for almost two years, reflecting the impact of price inflation and shaky consumer confidence. The latest figures from the BRC-KPMG Retail Sales Monitor show like-for-like sales down by 0.4% and total sales (including new space) up by a slim 1.1%. The performance was the worst since May 2009, excluding last April’s figures which were distorted by the timing of Easter.
Double digit growth was achieved in the home shopping sector but only just. Internet, mail order and phone order sales rose 10.4% in February, which was the smallest gain since August 2009.
“Food sales held up, but sales of non-food goods, particularly more expensive items such as furniture and electricals, suffered,” said Stephen Robertson, director general, British Retail Consortium. “After the big boost to January’s figures from one-off factors, including a strong final burst of pre-VAT rise spending, February’s figures are a return to a more realistic picture of how things are for customers and retailers.”
“Even online, the growth in sales of non-food items slowed to an 18-month low. Customers are cautious and cutting back in a big way on non-essential spending,” said Robertson.
Helen Dickinson, head of retail at KPMG, said: “There is inflation in these numbers, so volumes are lower and with people making less shopping trips fewer retailers are benefiting from the limited spending capacity available.”
She said February was a continuation of the trend seen in the latter part of January, with struggling non-food sales highlighting consumers’ caution over the outlook. “Food performed better than the previous month boosting the overall results slightly, but furniture, home and women’s clothing all had a poor month.”
Price, but more importantly value, has become an even higher decision-making criteria said Dickinson. “Consumers are re-adjusting their spending habits to reflect the reduced disposable income in their pockets and the key question for retailers is whether they have finished yet.” According to Asda, households are £9 a week poorer then they were a year ago.
