UK retail sales volumes fell by 0.4% in February 2026, according to data released by the Office for National Statistics on 27 March. This followed a strong 2.0% rise in January. Despite the month‑on‑month dip, sales were up 0.7% in the three months to February, buoyed by non‑store retail. Overall volumes remain 0.3% below pre‑pandemic levels.
Melissa Minkow, global director of retail strategy and insights at CI&T, stressed that February’s softness must be viewed in context. “After a strong January, the February dip partly reflects recalibration rather than a sudden drop in demand,” she said. “Demand hasn’t disappeared. Instead, it’s becoming more uneven, with shoppers taking more time to weigh up price, timing and necessity before they commit.”
Outdoor living looks strong in coming months
Shopify’s managing director for EMEA, Deann Evans, noted that Shopify’s own data points to a shift towards outdoor‑related spending, with strong growth across gardening, outdoor living and camping categories. “This is encouraging for the months ahead as the weather improves, clocks go forward and Easter bank holidays arrive,” she said. “To set themselves up for success, merchants must ensure they deliver value, convenience and best‑in‑class customer experiences across every shopping surface.”
Online spending continued to strengthen, with ecommerce’s share of total retail rising to 28.2% in February from 28.0% in January. Marty Bauer, senior ecommerce expert at Omnisend, described this period as a “critical moment for retailers to convert demand that has been building in the background.” He noted: “Online channels will have played a key role, as price comparison becomes second nature and shoppers quickly identify the best offers. Brands using targeted promotions and personalised messaging are likely to have seen the strongest returns.”
Economic headwinds lie ahead
However, Bauer cautioned that global political and economic uncertainty will create headwinds in the months ahead. “We are already seeing a clear drop of around 12% in average order value, despite an increase in the number of items being bought,” he said. “This suggests shoppers are trading down to cheaper alternatives to cut costs. Retailers will need to continue proving value if they want to maintain momentum.”
CI&T’s data echoes that sentiment. “Our own research shows that 64% of UK&I consumers intend to pull back on spending to manage rising costs, reinforcing that month‑to‑month sales figures are a balancing act,” Minkow said. “For retailers, consistent demand is becoming less reliable. Success will come from identifying key conversion moments in real time and using AI to optimise pricing, promotions and assortment.”
Nicholas Found, head of commercial content at Retail Economics, agreed that consumer spending is present but fragmented. “The winners will be those combining sharp value perception with genuine differentiation and disciplined execution across channels,” he said. “Strong results from Next this week demonstrate what’s still possible.”
He added: “In this environment, retailers need a much deeper understanding of who their customers are and what they value. Those that can respond with precision will be best placed to defend loyalty and capture market share.”
The analysts are clear that, despite February’s modest dip in UK retail sales, underlying demand remains – albeit in a more cautious, value‑driven and fragmented form, with uncertainty heightened by the ongoing conflict in the Middle East. Retailers that use data, personalisation and agile pricing strategies to engage consumers at the right moments will be best positioned to navigate uncertain months ahead and make the most of seasonal opportunities.
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