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

Retailers Suffer Worst Slow-Down In Nine Months As Economy Stutters

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.


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