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UK retail sales fell back unexpectedly in February as increased eating out hit the grocery sector and online sales fell back.

The Office of National Statistics this morning said that retail sales volumes fell by 0.3% in February 2022 following a rise of 1.9% in January, albeit sales volumes were 3.7% above their pre-coronavirus February 2020 levels.

Non-store retailing sales volumes fell by 4.8% over the month following strong growth in December (2.7%) and January (4%) as COVID restrictions eased and shoppers went back to physical stores. The proportion of retail sales online fell to 27.8% in February 2022, its lowest proportion since March 2020.

Food store sales volumes fell by 0.2% in February 2022 with large falls in alcohol and tobacco stores, which the ONS said “may be linked to higher spending in pubs and restaurants as confidence increased in going out”.

Supermarkets reported an increase of 0.3% over the month but that was offset by falls in specialist food stores (such as butchers and bakers) of 2% and alcohol and tobacco stores which fell by 16.1%.

Food store sales volumes are now 0.1% below pre-coronavirus February 2020 levels.

Non-food stores sales volumes rose by 0.6% in February 2022 with growth in clothing (13.2%) and department stores (1.3%), with wider socialising and the return to the office following the lifting of Plan B restrictions at the end of January driving activity.

These increases were partly offset by falls in other non-food stores (down 7%) and household goods stores (down 2.5%) with some retailers suggesting the stormy weather during the month had impacted footfall.

Automotive fuel sales volumes rose by 3.6% in February 2022 as the lifting of restrictions increased travel.

Morning update

Consumer confidence continues to nosedive as the cost-of-living crisis deepens, according to the latest consumer confidence index from GfK.

The index’s headline score dropped five points to -31 in March with all measures down in comparison to February.

The index measuring changes in personal finances over the last 12 months has decreased two points to -13, which is 11 points worse than March 2021. The forecast for personal finances over the next 12 months has decreased four points to -18, which has plunged 28 since this time last year.

The measure for the general economic situation of the country during the last 12 months is one point lower at -51, while expectations for the general economic situation over the coming 12 months have dropped by six points to -49, which is now 32 points lower than March 2021.

Joe Staton, client strategy director GfK, said: “A wall of worry is confronting consumers this month and there is an unmistakable sense of crisis in our numbers. Consumers across the UK are experiencing the impact of soaring living costs with 30-year-high levels of inflation, record-high fuel and food prices, a recent interest-rate hike and the prospect of more increases to come, and higher taxation too – all against a background of stagnant pay rises that cannot compensate for the financial duress.

“This is the fourth month in a row that UK consumer confidence has dropped. With a headline score of -31, we are at a level last seen in October and November 2020 when Covid numbers were rising. Confidence in our personal financial situation and in the wider economy are severely depressed while the daily news of unimaginable suffering from a horrifying war in Europe and rising COVID numbers at home is adding to the bleak mood.

“The outlook for consumer confidence is not good; it’s certain there’s more bad news to come.”

On the markets this morning, the FTSE 100 has edged back 0.1% to 7,461.3pts.

Risers include Nichols, up 4.3% to 1,356.4p, Bakkavor, up 1.9% to 118.4p and Devro, up 1.7% to 208p.

Fallers include B&M European Value Retail, down 3.6% to 560p, Deliveroo, down 2.3% to 118.2p and FeverTree, down 2.1% to 1,763p.

Yesterday in the City

The FTSE 100 closed yesterday edging up 0.1% to 7,467.4pts.

McColl’s Retail Group fell back 12.1% back to 1.8p on the news of the departure of its CEO Jonathan Miller.

Other fallers included Marks & Spencer, down 3% to 153.9p, Nichols, up 2.6% to 1,300p, FeverTree, down 2.3% to 1,801.5p, Coca-Cola HBC, down 2.2% to 1,595.5p, Ocado, down 1.9% to 1,103p and Finsbury Food Group, down 1.6% to 72p.

Risers included British American Tobacco, up 4% to 3,262p, Naked Wines, up 1.6% to 371p, Science in Sport, up 1.6% to 62p, Just Eat, up 1.4% to 2,598p, Cranswick, up 1.3% to 3,486p and B&M European Value Retail, up 1.3% to 580.6p.