UK retail gross sales delivered a shock increase in February, rising by 1 per cent month-on-month and defying expectations of a downturn, as customers continued to spend on clothes, homewares and family items regardless of lingering financial uncertainty.
The most recent figures from the Workplace for Nationwide Statistics (ONS) mark the second consecutive month of development in retail volumes, with analysts having forecast a 0.4 per cent contraction. Annual retail gross sales development additionally strengthened to 2.2 per cent, up from 0.6 per cent in January.
Non-food retailer gross sales, together with clothes and shops, rose by 3.1 per cent — the very best month-to-month stage since March 2022. Meals gross sales, nevertheless, fell again by 2 per cent following a robust 4.8 per cent improve in January.
Hannah Finselbach, senior statistician on the ONS, stated: “Retail sales jumped again in February, with increases across most sectors. However, after a very strong January, food sales fell back, particularly across supermarkets.”
She added that it was a very robust month for family items shops, which noticed their largest improve since April 2021 — largely pushed by ironmongery store gross sales. Clothes additionally noticed a average raise, with widespread discounting contributing to the uptick.
“Looking at the wider trend, retail sales are now showing growth across both the three-month and annual period but remain below pre-pandemic levels,” Finselbach stated.
The figures have raised hopes that the Financial institution of England may start reducing rates of interest earlier than anticipated, notably if inflation continues to ease. February’s inflation studying got here in at 2.8 per cent — down from 3 per cent in January — providing a well timed increase to Chancellor Rachel Reeves as she delivered her spring assertion.
Nonetheless, the inflation outlook stays unsure. Rising wholesale vitality costs and meals prices are anticipated to push inflation again up later this yr, with the Financial institution warning it may peak round 3.7 per cent. In the meantime, the Workplace for Funds Duty has downgraded its UK development forecast for 2025 to 1 per cent, whereas revising its inflation forecast upward to a mean of three.2 per cent.
Regardless of persistent pressures on family budgets and muted shopper confidence, February’s information suggests many patrons are nonetheless prepared to spend — particularly on discounted items and non-essentials — maintaining the excessive road ticking over for now.
