February retail figures – shoppers seek a bargain

The office for National Statistics has reported retail sales figures in Great Britain for February:

• Retail sales volumes are estimated to have increased by 1.2% in February 2023 following a revised rise of 0.9% in January.
• Year-on-year sales fell 3.5%, better than the expected decline of 4.7%.
• Total non-food stores sales volumes (department, clothing, household and other non-food stores) grew by 2.4% over the month.
• Online sales volumes rose by 0.2%, helped by sales promotions. 

Nicholas Hyett, Investment Analyst at Wealth Club commented:

“The UK is finding it’s shopping habit hard to kick it would seem. Retail sales volumes have come in stronger than expected for the second month this year despite the cost of living squeeze. 

But beneath that headline, there’s clear evidence that shoppers are being careful with their money. Growth in non-food sales was driven by discounters and second hand shops, while the rise in food volumes is attributed to people choosing to eat in and avoid pricey meals out. Shoppers may be more willing to spend, but only when there’s a bargain to be had.

Longer term, sales volumes remain lower than they were this time last year. With the Bank of England expecting the UK economy to hold up better than previously expected, that provides room for several months more sales growth. Whether shoppers find the confidence to return to the mid-market space though remains to be seen.”