Retail sales grow in February, but food in decline: BRC

Sales increased by 6.7 per cent in February on a total basis, according to the BRC-KPMG Retail Sales Monitor, but food was in decline year-on-year.

The figures, however, compare with February 2021, when non-essential retail stores were closed. On a two-year basis, total retail sales grew 4.9 per cent during February compared with the same month in 2020. Growth was subdued on a like for like (LFL) basis, with 2.7 per cent increase year on year.

With inflation running at historically high levels, a portion of the sales growth might reflect rising prices rather than increased volumes, the BRC said, as the sales are not adjusted for inflation.

Over the three months to February, food sales increased 0.1 per cent on a total basis and decreased 0.3 per cent on an LFL basis. For the single month of February, Food was in decline year-on-year.

During the same period, non-food retail sales increased by 12.0 per cent on a total basis and by 6.9 per cent on an LFL basis.

In-store sales of non-food items grew 71.2 per cent on a total basis and 57.2 per cent on an LFL basis in this period, reflecting the closure of stores last year.  On a two-year comparison, sales however declined 7.5 per cent on a total basis and increased 3.1 per cent on an LFL basis since February 2020.

Online non-food sales decreased by 28.4 per cent during February, compared with growth of 82.2 per cent February 2021. On a two-year comparison, sales increased by 26.9 per cent in February.

Non-food online penetration rate decreased to 40.8 per cent in February from 65.4 per cent in February 2021. However, it was up 10.0 percentage points on the 30.8 per cent seen at the same point in 2020.

“While online sales remained down on last year, the new spending habits driven by the pandemic have settled into a new normal, particularly for non-food, with four in every ten pounds now spent online compared to three in every ten before the pandemic. Retail has driven five years’ of digital transformation in 24 tumultuous months,” commented Helen Dickinson, chief executive  of the British Retail Consortium (BRC).

She however warned that the future is looking increasingly uncertain, with current demand unlikely to be sustained.

“Consumer confidence, falling in recent months, will likely tumble further against the backdrop of the current geopolitical events. The cost of living will continue to spiral due to global inflation, increasing energy bills and the rise in national insurance this Spring. With households facing lower disposable income, discretionary spend will be one of the first things to feel the squeeze,” she said.

Commenting on the food and drink sector performance, Susan Barratt, chief executive of IGD, said: “Food and drink sales put in a resilient performance in February and although the market isn’t performing at the same rate as the lockdown-boosted growth of 2021, it remains elevated compared to 2020. Part of this will be down to inflation of course, which is undoubtedly playing a role, as shoppers face the fastest rise in the cost of living in 30 years.

“Against this backdrop, it’s no surprise that IGD’s Shopper Confidence Index continued its decline in February, reaching another all-time low since the index started in 2013. Anxiety among shoppers has no doubt been exacerbated by continued rising inflation, Ofgem’s confirmation that the energy price cap will increase by 54 per cent in April and uncertainty over how Russia’s intervention in Ukraine will impact supply chains and food prices.”