Data from the Office for National Statistics (ONS) show that retail sales volumes in the UK increased by an unexpected 1% in February despite flagging consumer confidence and lacklustre economic growth. Economists had predicted a 0.4% contraction.
The figure fell short of January’s 1.4% rise but still marked the second expansion in a row at a time when many consumers continue to face pressure on their finances.
Non-food store sales volumes grew strongly in February, with rises across all four sub-sectors – department (+0.7%), other non-food (+3.1%), clothing (+2.3%), and household goods stores (+6.8%). However, volumes in food stores slipped 2.0% as demand in supermarkets fell back from a strong start to the year.
Nicholas Found, Head of Commercial Content at Retail Economics, commented: “February brought mixed fortunes for retail, sensitive to seasonal events and discounting. While Valentine’s Day offered a lift to traditional gifting categories such as fragrances, the wider picture remains challenging. Consumer confidence is fragile, the cost of living continues to dominate household concerns, and retailers are bracing for a wave of rising operating costs from April.
“Shoppers are laser-focused on promotions and essentials, deferring bigger-ticket purchases as inflation’s bumpy path back to target has engrained a value-driven mindset. Promotional activity is no longer a tactical lever – it’s becoming a structural retail strategy to drive non-essential sales.”
He added: “From next week, retailers are staring down the barrel of a triple threat, including rising minimum wages, increased National Insurance contributions and higher business rates. This cocktail of costs will squeeze already thin margins and risks triggering job losses, hurting investment and accelerating store closures. For many retailers, the challenge now is how to absorb these costs without alienating price-sensitive consumers.”
