Slowdown in retail sales in February

In February, UK retail sales decreased by 0.1 per cent on a like-for-like basis from February 2018, when they had increased 0.6 per cent.

The British Retail Consortium (BRC) reported on the period between 27 January – 23 February 2019, that on a total basis, sales increased by 0.5 per cent, but this was below both the three- and 12-month averages of 0.9 per cent and 1.2 per cent respectively.

Over the three months to February, in-store sales of non-food items declined 2.8 per cent on a total basis and 3.1 per cent on a like-for-like basis.

In addition, over these three months, non-food retail sales in the UK decreased 0.6 per cent on a like-for-like basis compared to the same period last year.

However, online sales of non-food products saw growth of 5.4 per cent in February. This is against a growth of 6.4 per cent in February last year.

Helen Dickinson OBE, Chief Executive, British Retail Consortium, commented: “Uncertainty surrounding the UK’s imminent exit from the European Union has hit consumer spending. While real incomes have started to rise over the past year, shoppers have been reluctant to spend this February, holding back growth. This slowdown was not limited to physical stores, with growth in online non-food sales well below the 12-month average.”

Paul Martin, UK Head of Retail at KPMG, added: “Following a modest recovery in January, February saw a slowdown in sales. Across all categories there was sluggish growth; non-food continues to be under more pressure than grocery, with shoppers focusing on the essentials. To manage these dynamics, retailers have to continue managing cost and margin and carefully assess how to gain market share in a broadly flat market.”

Jat Sahi, Digital Lead for Retail at Fujitsu UK, advised that retailers now need to attract shoppers back to their physical stores.

“One of the high street’s core advantages is that it can be a social hub for groups to have shared experiences. Consumers are now looking for a unique social experience to consumers, something which cannot be replicated online, and as wider macroeconomic factors take a toll, retailers need to inspire them to browse and buy.

“To drive this, shops need to turn their operations inside-out. Rather than imposing a generic line of products and a uniform approach to store layouts, retailers need to be led by consumers. And the best people to ensure this happens are those who serve customers every day – the shop floor staff.

“The key to making this approach work is to ensure that staff have the time and headspace required to engage and inspire shoppers.”