Food sales down in February after large falls in alcohol and tobacco

Retail sales volumes fell by 0.3 per cent year on year in February following an unrevised rise of 1.9 per cent in January, official data has shown Friday.

According to the Office for National Statistics (ONS), the sales volume were, however, 3.7 per cent above their February 2020 levels. In value terms, the sales were 10.2 per cent higher from pre-pandemic period.

Food store sales volumes fell by 0.2 per cent in February with large falls in alcohol and tobacco stores, which the agency said might be linked to higher spending in pubs and restaurants as confidence increased in going out.

Supermarkets reported an increase of 0.3 per cent over the month but that was offset by falls in specialist food stores (such as butchers and bakers) of 2 per cent and alcohol and tobacco stores which fell by 16.1 per cent.

Food sales volumes were 0.1 per cent below their pre-pandemic levels in February 2020.

Online sales volumes fell by 4.8 per cent over the month following strong growth in December (2.7%) and January (4%). However, sales volumes were 33.2 per cent above pre-pandemic levels.

The proportion of retail sales online fell to 27.8 per cent in February, its lowest proportion since March 2020 (22.7%), continuing a broad downward trend since its peak in February 2021 (37.7%).

The ONS noted that sales volumes have broadly fallen since June 2021 as consumers diverted spending to services as the wider economy reopened. Affordability may also explain some of the fall in recent months, the agency added, as its latest Opinions and Lifestyle Survey covering the period 16 to 27 February found that 81 per cent of adults reported that their cost of living had increased over the last month.

This was 12 percentage points higher than the 69 per cent in the period 19 to 20 January 2022 with the most frequent reported reason being rising food shop prices (92%). Of the actions taken because of an increase in the cost of living, 30 per cent reported spending less on food shopping and essentials.

Commenting on the figures, Helen Dickinson, chief executive of the British Retail Consortium, said: “Sales growth fell slightly in February as rising concerns about inflation appeared to dampen consumer appetites.

“Stronger sales results could be seen for clothing and footwear, while food spend remained down on last year for the second consecutive month. Online sales fell as compared to last year, when the country was in its third lockdown, as more people returned to the shops. Nonetheless, as competition for limited consumer spend increases, retailers must continue to invest in their physical and digital offerings.”

She noted that consumers face a “rocky road” ahead, with rises in the energy price cap and NI contributions both coming next week, alongside the continued rise in inflation and the uncertainty created by the situation in Ukraine.

“While the Chancellor’s Spring Statement offered some relief for consumers, rising inflation and next week’s rise in the energy price cap mean that real discretionary incomes are likely to fall in the coming months, as the cost of living soars,” she added.