Shoppers scrambling for gifts in the lead up to Valentine’s Day helped boost retail sales in February, however the sector has warned that it’s still facing “volatile trading conditions”.
According to figures published by the British Retail Consortium (BRC), UK total retail sales increased by 5.2 per cent in February as consumers showed they were still willing to spend on loved ones despite a rise in the cost of living.
While retailers benefited from a slight increase in sales over the Valentine’s period, which traditionally sees consumers splash out on restaurant meals and flowers, the figure still underperformed compared to the same period last year which saw sales grow by 6.7 per cent.
“Retail sales held up better than expected this February, though volumes remained down on last year. While the cost of living crisis has made customers increasingly price sensitive, they are still ready to celebrate special occasions,” Helen Dickinson OBE, chief executive of the BRC, said.
Despite the rise in sales, Dickinson warned the UK was narrowly avoiding a recession and said soaring inflation had created “volatile trading conditions” for retailers for the year ahead.
She said: “To protect people from ongoing price rises for goods, government must avoid additional regulatory costs on business that compromise retailers’ ability to invest in lowering prices and in other areas that would contribute to the UK’s economic recovery.”
Moreover, as shoppers battled a hike in the price of grocery essentials, food sales also increased 8.3 per cent on a total basis and 8.2 per cent on a like-for-like basis over the three months to February. This is above the 12-month total average growth of 4.3 per cent.
Paul Martin, UK head of retail at KPMG, said: “With overall inflation running at around 10 per cent and food inflation sitting nearer 20 per cent, total sales growth for February of just five per cent will be eating hard into retail margins and masking the true state of the sector’s health.”
He continued: “The outlook will continue to be challenging with falling consumer spending in real terms and as more people choose to shop by ‘occasion’, retailers will be pulling out the stops for a buoyant Easter and Mothers’ Day.”