Period covered: February 19Published: March 05, 2019Read time: 1min

Retail Sales Monitor

Sales Dragged Down by Uncertainty

Helen Dickinson OBE, Chief Executive, BRC: 

“Uncertainty surrounding the UK’s imminent exit from the European Union has hit consumer spending. While real incomes have started to rise over the past year, shoppers have been reluctant to spend this February, holding back growth. This slowdown was not limited to physical stores, with growth in online non-food sales well below the twelve month average.

“With consumers increasingly aware of the risk of a no deal Brexit, it is likely that uncertainty has driven this cautious approach to retail spending. If government wishes to reassure both the public and businesses, they should ensure a chaotic no deal – which would lead to higher costs, higher prices, and less choice for consumers – is taken off the table with immediate effect.”

Paul Martin, UK Head of Retail, KPMG: 

“Following a modest recovery in January, February saw a slowdown in sales. While consumer spending has so far remained relatively resilient, driven by factors such as low unemployment and wage growth, it would seem that continuing political and economic uncertainties are beginning to notably affect shoppers’ spending habits.

“Across all categories there was sluggish growth, and the milder weather appears to have shifted the focus away from indoors with furniture sales declining - and not even Valentine’s Day could boost sales in the stationery category.

“However, the full impact of the recent unseasonably warm weather is yet to be seen, especially for the clothing categories, and online sales growth remained steady. 

“Non-food continues to be under more pressure than grocery, with shoppers focusing on the essentials. To manage these dynamics, retailers have to continue managing cost and margin and carefully assess how to gain market share in a broadly flat market.”

Food & Drink sector performance, Susan Barratt, CEO, IGD: 

“A mild February provided the backdrop for modest food and grocery sales growth versus a year ago, when the figures were boosted by end-of-the-month stock-building ahead of a big freeze.

“The countdown to Brexit has had little effect on total food and grocery sales so far, with the majority of people shopping as normal. However, 21 per cent of shoppers say they will focus more on saving money from their grocery shopping in the year ahead versus 16 per cent this time last year.”