Retail sales in February were badly hit by wet weather and recovery will be tougher thanks to conflict in the Middle East, according to the BRC.
Spending was weak across most categories, according to the latest BRC-KPMG retail sales monitor.
Total UK retail sales in February were up 1.1% year on year, compared with an average 2.3% year-on-year growth over 12 months.
Food sales were up by 2.9% year on year, compared with average 12-month growth of 3.8%.
Non-food sales fell by 0.4% year on year in February, compared with 12-month average growth of 1%.
“February’s grey, wet weather hit retail sales hard,” said BRC CEO Helen Dickinson.
“Spending was weak across most categories, online and in store, as households pulled back after Christmas and January’s rebound. Food sales were flat in real terms as shoppers tightened their belts. Valentine’s Day did provide a bright spot, with jewellery, watches and perfume performing better as people still treated loved ones.”
Dickinson warned conflict in the Middle East would drag on consumer sentiment.
“While retailers look to spring and better weather to lift spirits and revive sales, conflict in the Middle East threatens knocking any recovery off course,” she said.
“Prolonged low consumer confidence adds strain on retailers already facing mounting cost pressures, higher taxes and a growing regulatory burden.”
IGD CEO Sarah Bradbury said the conflict could add to inflation in food prices through rising fuel costs.
“February delivered one of the wettest months on record, yet shopper sentiment still saw a modest lift thanks to easing inflation and news of a forthcoming 7% cut in energy prices, offering a rare sense of financial reprieve,” Bradbury said. “Seasonal spikes around Valentine’s Day and Pancake Day boosted at-home dining but failed to translate into volume growth.
“As March begins, the outlook is deteriorating. The OBR’s latest forecast downgraded near term growth, whilst the conflict in the Middle East is strengthening concerns over fuel costs, which could impact food price inflation, if the situation continues.
“Together, these risks suggest February’s uptick in sentiment may prove short-lived.”
Linda Ellett, KPMG UK head of consumer, retail and leisure, said: “Health and wellbeing-related purchases helped to drive modest monthly retail sales growth in February. But minus food and drink sales, the momentum wasn’t strong enough to keep growth going for total non-food goods.
“While some channels, categories, and brands are showing there is still room to thrive, the combination of ongoing business costs and limited consumer spending is challenging others.”
The monthly retail sales snapshot came on the same day as Barclays figures showing card spending increased just 1% year on year in February, well below the latest CPIH inflation rate of 3.2%. Essential spend was down 0.6%, while non-essential spending reached a six-month high of 1.8% growth.
Barclays said confidence levels in the UK, European, US and global economies all fell after news of the Middle East conflict broke at the end of February.
Barclays head of retail Karen Johnson said: “February’s data highlights the careful balancing act shoppers face in navigating rising costs amidst global uncertainty. While we’re seeing a continued appetite to spend on categories such as entertainment and wellness, obtaining value for money and savvy spending will remain a strong focus in the months ahead.”
Within retail, clothing (3.7%), general retailers and marketplaces (4.6%) and pharmacy, health & beauty (6.4%) all remained in card spending growth, according to Barclays.
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