According to data from the Office for National Statistics (ONS), retail sales in the UK demonstrated a positive trend in February, with a 1.2% increase compared to January. However, when compared to the previous year, sales volumes were down by 3%. This decline can be attributed to the high levels of inflation experienced during this period.
The rising inflation has posed a major concern for retailers as it has resulted in increased costs. Despite the increase in sales volumes, the value of February’s retail sales only rose by 1.6% compared to January and 5.5% compared to the previous year. This indicates that the value of sales is not keeping pace with inflation.
Retailers appear to be absorbing some of the higher costs instead of passing them onto consumers through price hikes. This cautious approach suggests that retailers are aiming to maintain their market share and avoid discouraging customers by increasing prices.
In terms of specific sectors, sales volumes in non-food stores, which include department stores, clothing stores, and other non-food retailers, saw a 2.4% rise compared to January. However, sales volumes in this category fell by 1.7% when compared to February 2022.
Within the non-food sector, department stores experienced a noteworthy increase in sales volumes, rising by 5.5% in February. Clothing stores also witnessed growth, with sales volumes increasing by 2.9%. This growth can be attributed to strong sales at discount stores.
Online spending also played a significant role in February’s retail sales. While the overall value of online sales decreased by 3.5% compared to the previous year, online spending increased by 2.6% compared to January. Clothing and footwear stores saw a positive trend in online sales, with a 4.3% increase compared to the previous year and a 0.4% increase compared to January.
The ONS highlighted that online sales accounted for 25.4% of total sales in February, surpassing the pre-pandemic level of 19.8% in February 2020. This underscores the ongoing significance of online retail in the current market.
Overall, although UK retail sales volumes demonstrated growth in February, the values of these sales are struggling to keep up with inflation. Retailers are grappling with escalating costs and are hesitant to pass them on to consumers through price increases. The increase in online sales also indicates a shift in consumer behavior, with online shopping becoming increasingly prevalent in the retail industry.
Useful links:
1. BBC: UK retail sales up 1.2% in February
2. Office for National Statistics: February 2022 retail sales
