–BRC: UK Feb Like-for-Like Sales -0.3% Y/Y; Total 2.3% Y/Y
–Food Sales Pick Up, But Discounts Fail To Prevent Non-Food Weakness
LONDON, (MNI) – UK retail sales fell further on a like-for-like
basis in February compared with a year ago, according to the British
Retail Consortium.
The BRC/KPMG February data showed like-for-like sales down 0.3% on
the year, exactly the same rate of decrease seen in January while total
sales were up 2.3% on the year. The official retail sales data showed
strong volume growth in January but these BRC data suggest the pace of
growth has not been maintained.
On a three-month basis sales were up just 0.6% from the same
three-month period of 2010-11 and total sales rose 2.9% basis.
For the BRC, the latest survey data showed that a strong consumer
recovery is illusory and it cited concerns over the threat from fuel
price rises as well as from the Budget.
The BRC said that “food sales had picked up, helped by stocking up
in the very cold weather. Yet, non-food had weakened further, despite
continued promotions and discounts. For clothing, footwear and
homewares, February was worse than January and December, especially for
larger purchases, hit by consumer caution”.
The result is in line with the recent survey from the CBI which
showed some reasonable consumer demand, but this was centered on food
and other essentials.
Stephen Robertson, Director General, British Retail Consortium,
lamented the latest signs of weakness in sales:
“The reality of weak sales shows that a convincing revival remains
illusory. Falling inflation has eased the squeeze on household finances
and halted the slide in consumer confidence but that’s at risk from fuel
price rises and Budget uncertainty.”
Helen Dickinson, Head of Retail, KPMG, warned that sales remained
promotion-led and that retailers’ margins were therefore under pressure:
“February’s results were similar to January’s but with very
different dynamics. Food performed better than in the previous month but
many non-food sectors struggled. The timing of half term caused plenty
of variability during February …
“Consumers remain reluctant to spend unless encouraged by
promotional activity. Thus, while the market is still growing slightly
in headline sales terms, profitability continues to be eroded through
loss of margins.
Bank of England Monetary Policy Committee officials have vented
optimism that second half of the year should see some revival of
consumer demand as the fall in inflation helps bring about a rise in
real household disposable income. The latest rise in oil prices as well
as mortgage rates rising as some banks pass on increased wholesale
funding costs could jeopardize such a benign outcome.
–London newsroom: +44 20 7862 7491; email: dthomas@marketnews.com
[TOPICS: M$B$$$,MABDS$]
