The latest data released today (25 March) by the Office for National Statistics (ONS) shows non-food stores sales volumes rose by 0.6% in February, compared to the prior month, with strong growth in clothing stores at 13.2% and department stores up 1.3%.

Overall, retail sales volumes fell by 0.3% in February following a rise of 1.9% (unrevised) in January. Sales volumes were 3.7% above their pre-coronavirus February 2020 levels.

Meanwhile, the proportion of retail sales online fell to 27.8% in February, its lowest proportion since March 2020 (22.7%), continuing a broad downward trend since its peak in February of last year (37.7%).

Despite the ongoing trend, the proportion of sales made online is still above its level of 20% in February 2020 before the pandemic.

Online spending values were also down during the month, declining by 0.7% when compared with January, with falls in all sub-sectors apart from clothing stores which increased by 0.7%.

February clothing uptick

Jacqui Baker, partner and head of retail at RSM UK, says despite restrictions easing and more commuters returning to the office, multiple February storms battered the UK and dampened consumer spending as retail sales fell by 0.3%. Despite the overall fall, clothing sales were up by 13.2%, she adds.

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“The February data shows a snapshot in time, and the geopolitical and global economic landscape has now changed – accelerating the cost of living crisis through soaring energy prices, increased interest rates and further pressure on commodities adding to price inflation. As household budgets feel the squeeze, the competition for spend has also increased.

“These headwinds – coupled with increased staff costs; rates and VAT reliefs coming to an end; and an increased payroll headache following the Spring Statement to increase the national insurance threshold in July – all present a challenge for retailers at a time when consumers will be tightening their belts.

“Introducing urgent business rates reform in this week’s Spring Statement would have been a welcome boost for retailers, but the Chancellor missed the opportunity, again, to rebalance the playing field and ensure retailers are paying the fair amount.

“Set against this backdrop, Baker says it’s no surprise that retailers are innovating.

“Brands are looking to diversify and branch out into market towns and coastal cities, as well as key city centre locations – adapting to new ways of working post-Covid and making the most of increased footfall in these areas to support their post-pandemic recovery.”

Meanwhile, Oliver Vernon-Harcourt, head of retail at Deloitte, notes February’s subdued retail sales reflect declining consumer confidence as price increases continue to erode consumer spending power.

“The rising cost of energy, food and fuel saw sales values rise 0.7% month-on-month. At the same time, sales volumes fell 0.3% over the same period, a sign that some consumers have started to buy less in response to growing inflationary pressures,” he says.

“Rising inflation is coming at a time when retailers are still contending with supply chain disruptions and other cost pressures. The result is uncertainty for both consumers and retailers, who may be reconsidering how they will allocate their spend for the rest of the year.”

Vernon-Harcourt adds consumer sentiment is likely to be challenged in the coming months as the cost of living rises. However, some consumers may be better positioned than others, in some cases through accumulated savings over the course of the pandemic.

“With price rises predominantly impacting essential categories, it is the low- and middle-income households that will be hit the hardest. Retailers will need to meet consumers’ expectations through providing the right product ranges and availability.”

UK clothing store sales volumes in January dropped 5% on the month prior and were 12.6% below pre-pandemic levels in February 2020.