Retailers suffer wettest February on record
The wettest February on record led to a miserable month for retailers, with toy sales the only bright spot as parents tried to occupy children inside, new figures show.
Total UK retail sales were up by just 1.1% year on year in February, against growth of 5.2% last February, according to the BRC (British Retail Consortium)-KPMG Retail sales monitor
Food sales were up 6% year on year over the quarter, but even this was below the last February’s growth of 8.3%.
Meanwhile, non-food sales were down 2.5% year-on-year over the three months, against growth of 3.2% last February – steeper than the 12-month average decline of 0.9%.
BRC chief executive Helen Dickinson said: “Consumer demand was dampened by the wettest February on record, translating into a poor month of retail sales growth.
“Not even Valentine’s Day lifted customers out of the gloom, and gifting products that typically sell well, like jewellery and watches, failed to deliver. On the sunnier side, rainy weather did brighten sales of toys, as parents looked for ways to occupy their children indoors.”
Linda Ellett, UK head of leisure and retail consumer markets at KPMG, said: “As many households continue to adapt budgets to meet higher essential costs, including higher mortgage rates, consumer reluctance to get out there and start spending is likely to remain in the short term.
“With big increases in labour costs and business rates just weeks away, adding to an already stressed cost agenda for retailers, many will be pinning their hopes on some good news in the Chancellors’ Spring Budget this week to help kick-start a spending revival on the high street.”
Separate figures from Barclays also suggest that the wet weather and events such as the Super Bowl and BAFTA awards encouraged households to enjoy nights in front of the TV instead of going out in February.
Takeaways and fast food sales increased 5% year-on-year, while digital content and subscriptions saw its highest growth at 11.8% since August 2021, spurred by popular new releases like One Day.
Spending on public transport increased just 3.8% – the smallest rise since March 2021 – as wet and icy weather combined with industrial action caused train cancellations and delays across the country.
Karen Johnson, head of retail at Barclays, said: “February’s wet weather meant Brits chose to spend more time indoors, resulting in a slowdown in high-street and hospitality spending.
“With Brits having reined in discretionary spending during the winter months, and as inflationary pressures begin to ease, retailers will be hopeful that the onset of warmer weather lifts spending – particularly if consumer confidence improves in the summer.”
Helen Brocklebank, CEO of luxury industry body Walpole, said that while the wet weather certainly played a role in February's poor performance, Chancellor Jeremy Hunt could aid the beleaguered retail industry by reintroducing VAT-free shopping for tourist in his budget on 6 March.
“While the slump in retail sales can be partly attributed to unpredictable British weather – last month was one of the wettest Februarys on record - today’s data strengthens the case for Jeremy Hunt to use this week’s Spring Budget to reintroduce VAT-free shopping. Scrapping the 'tourist tax' will help boost spending among visitors from across the globe, while helping to support regional manufacturing, hospitality and retail jobs throughout the UK. Our calls are not happening in a silo – in fact a 64-strong group or MPs and peers recently pledged its support, alongside hundreds of businesses.
“As central banks start to loosen monetary policy, with the UK being one of many economies preparing for a “soft landing”, boosting consumer purchasing power is vital in assisting the UK retail sector to reach long-term prosperity and helping to pave the way for economic growth. Such a move would provide a massive boost to the UK’s luxury sector, which already contributes over £48bn to the economy each year and supports 156,000 jobs across the regions.”
