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Retail

UK Retail Sales Fall As Online Spending Drops, Fuel Prices Pinch

British retail sales unexpectedly fell in February as online shopping sank back to its levels at the start of the COVID-19 pandemic and surging fuel prices took up a bigger chunk of household budgets, official data showed on Friday.

Sales volumes were down by 0.3% from January, the Office for National Statistics said.

Economists polled by Reuters had on average forecast a 0.6% monthly rise in retail sales.

Excluding automotive fuel, which rose in price in February as tensions between Russia and Ukraine escalated, sales fell by a sharper 0.7%.

Retailers fear a tough remainder of the year as inflation accelerates from levels that are already their highest in 30 years. The government's budget watchdog thinks the consumer price index, which hit 6.2% in February, will go close to 9%.

Read More: Dutch Consumer Mood 'Deteriorated In March', CBS Says

Consumer Confidence

A poll published earlier on Friday showed British consumer confidence in March sank to levels last seen in late 2020 due to worries about inflation, higher interest rates and the war in Ukraine.

The ONS said sales volumes last month were 3.7% above their pre-coronavirus levels of February 2020 but the share of online sales in value terms was its lowest since March 2020 at 27.8%.

The fading of the wave of Omicron coronavirus cases hit spending on food - down 0.2% on the month - as people returned to pubs and restaurants but the increase in socialising and returning to workplaces led to a 13% leap in clothing sales.

Similarly, volumes of fuel bought surpassed their pre-pandemic levels for the first time after the lifting of coronavirus restrictions, the ONS said.

Household goods stores saw a 2.5% drop in sales and some retailers suggested stormy weather last month impacted footfall.

Compared with a year earlier, overall sales volumes were up by 7.0%, short of the 7.8% growth expected in the Reuters poll.

News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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