The ONS estimates that retail sales volumes increased by +1.2% MoM in February 2023, following a rise of +0.9% in January 2023 (revised from a rise of +0.5%). Sales volumes fell by -3.5% YoY.
This was the largest monthly increase since October 2022 (+1.4%), which was affected by the additional bank holiday for the State Funeral of HM The Queen in September, says ONS. The increase over the month to February 2023 returns sales volumes to February 2020 pre-pandemic levels.
Non-food stores sales volumes rose by +2.4% over the month, due to strong sales in discount department stores. Household goods stores sales volumes fell by -0.3% MoM.
Non-store retailing (predominantly online retail) sales volumes rose by +0.2% MoM, following a rise of +2.9% in January.
Jon Boland, GM of smart payment and commerce solutions provider Clover UK, comments: "Retail and hospitality businesses will be breathing a sigh of relief that the rebound in consumer confidence and spending seems to be sustained in the face of disposable incomes being squeezed.
"But the picture is far more complex when we look across our customer base of more than 80,000 SMEs. As inflation bites, we’re seeing a clear drive towards value. Our data shows that consumers are spending strongly in discount stores and on groceries as consumers are broadly prioritising necessities and seeking out deals that offer more bang for their buck. We also continue to see spending holding up strongly in bars, pubs, restaurants and other entertainment venues, which means that there is still space in the customer’s wallet for some modest luxuries.
"On the other side of the coin, spending on hotels, travel and luxury retail is relatively weak. These trends seem unlikely to reverse until inflation eases and consumer confidence normalises. For smaller businesses, this means a laser focus on costs, cashflow and inventory management will remain critical in the months ahead – as will their ability to appeal to belt-tightening consumers to protect revenues."
