UK Economy: Retailers Suffer Worst Slow-Down In Nine Months, Stats Show

22/03/2012 09:45 GMT | Updated 22/05/2012 10:12 BST

Retailers suffered their worst sales performance in nine months in February as families continued to rein in spending, official figures revealed.

Retail sales volumes fell by a larger-than-expected 0.8% between January and February, the Office for National Statistics (ONS) said, driven by a weak show from the clothing and household goods sectors.

And hopes for growth in the wider economy in the first quarter of the year were dealt a further blow as retail sales volumes in January were downwardly revised to 0.3% from an estimate of 0.9%.

A recent fall in inflation from above 5% has eased the squeeze on household finances but February's figures, which also revealed a 0.4% drop in retail sales values, show consumers are still reluctant to spend.

The City had been expecting a 0.4% decline in February.

A total £24.6bn was spent in the retail sector last month, compared to £24.4bn in January and £23.9bn the previous year, the ONS said.

Food stores saw sales volumes drop 0.1% between January and February, despite customers stocking up on cupboard staples during snowfall and freezing temperatures at the beginning of the month.

Non-food stores fell 1.5% month-on-month, driven by a 1.2% drop in clothing and footwear sales.

The decline came despite continued evidence of heavy discounting among retailers, which helped cut the overall rate of consumer prices index inflation to 3.3% in February.

The other stores sector, which covers a range of products from carpets to rugs and toiletries to watches, fell 3%.

The ONS identified within that sub-sector particularly steep declines in specialised stores such as fine art dealers and antique retailers.

The downwardly-revised volume figure for January, which had initially given some hope of a boost to the overall economy from the retail sector at the start of the year, was driven by a weak performance from smaller retailers.

Many small businesses submitted their survey results later, the ONS said, and they were worse than estimated.

The non-store retailing sector, which includes internet sales, also declined 0.4% in February.