February saw continuedÂ sales growth, althoughÂ dampened by Storm Eunice and falling consumer confidence, according to the British Retail Consortium (BRC) and KPMG
Covering the four weeks from January 30 to February 26, the BRC-KPMG monthly retail sales monitor reports that on a total basis, sales increased by 6.7% in February, against an increase of 1.0% in February 2021.
KPMG UK head of retail Paul Martin commented: â€œRetailers saw continued sales growth on the high street in February with sales up nearly 7% on last year when the UK was subject to lockdown restrictions.
â€œOnline sales volumes continued to fall across all categories compared with February 2021. Online penetration however remains considerably higher than pre-pandemic levels, forcing retailers to continuously focus on re-engineering their business models to find the right mix between physical and online retailing.
“As we move into a new phase of managing Covid, retailers will be focused on keeping consumers spending, as theÂ cost-of-livingÂ squeeze threatens the health of the sector”
â€œAs we move into a new phase of managing Covid, retailers will be focused on keeping consumers spending, as the cost-of-living squeeze threatens the health of the sector. With travel very much reopened, retailers are facing a double whammy of competing for share of wallet at the same time as the cost of living hits a high not seen in at least three decades.
â€œAs is the case for consumers, retailers also face tough inflationary pressures and will have to make challenging decisions around how to absorb those – or pass them on without losing custom. It could be a challenging time ahead for some in the sector, should consumers choose to cut their spending to manage increasing household bills.â€
BRC chief executive Helen Dickinson OBE added: â€œWhile online sales remained down on last year, the new spending habits driven by the pandemic have settled into a new normal, particularly for non-food, with four in every ten pounds now spent online compared to three in every ten before the pandemic. Retail has driven five years of digital transformation in 24 tumultuous months.
â€œThe future is looking increasingly uncertain, with current demand unlikely to be sustained. Consumer confidence, falling in recent months, will likely tumble further against the backdrop of the current geopolitical events. The cost of living will continue to spiral due to global inflation, increasing energy bills and the rise in national insurance this spring. With households facing lower disposable income, discretionary spend will be one of the first things to feel the squeeze.â€