29 May 2024, 03:48
By Furniture News Mar 09, 2023

Retail sales "better than expected" in February, says BRC-KPMG

Total UK retail sales increased by +5.2% YoY in February, against an increase of +6.7% in February 2022, according to the latest data from BRC-KPMG.

LFL retail sales increased +4.9%, against an increase of +2.7% in February 2022. 

Online, non-food sales decreased by -3.1%, against a decline of -28.4% in February 2022. The proportion of non-food items bought online decreased to 38.5%, from 40.3% in February 2022.

Helen Dickinson OBE, chief executive of the British Retail Consortium (BRC), says: “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. This helped deliver strong sales of fragrance and jewellery for Valentine's Day. 

Paul Martin, UK head of retail at KPMG, adds: “With overall inflation running at around 10%, and food inflation sitting nearer 20%, total sales growth for February of just 5% will be eating hard into retail margins and masking the true state of the sector’s health.

“Consumers are continuing to hold back on non-essential spending, with sales of clothing, footwear and accessories, which have been very influential in spending for many months, continuing to decline in February. Furniture and homeware have been driving sales growth on the high street and online, but we are starting to see more categories record negative sales YoY, as household budgets remain squeezed.

“With increases in energy, broadband, mobile phone and council tax bills on the horizon, consumers will continue to take steps to reduce spend where they can - switching where they shop, what they buy, whilst also cutting back on activities, such as eating out and takeaways. As much of the growth in retail is being driven by inflation, price and promotional strategies have become increasingly important growth engines for retailers. Online retailers will also have to review their business models, and there are likely to be some failures in this space, particularly among the businesses that are currently over-valued following the surge in demand during the pandemic which has now decelerated.

“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 Mother's Day.”

Furniture ranked seventh of 13 categories for total sales, and third of 10 categories for online sales growth.

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