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BRC-KPMG: February retail sales growth slows

Shopping centre escalator

UK retail sales rose by 0.1% on a like-for-like basis from February 2015, when they had increased 0.2% from the preceding year. On a total basis, sales were up 1.1%, against a 1.7% rise in February 2015. After January's acceleration, February's slowdown puts the three-month average growth in line with the 12-month average at 1.8%.

- Adjusted for the BRC-Nielsen Shop Price Index deflation of 2.0%, total growth was 3.1% in February against 3.7% and 3.6% for the 3-month and 12-month averages respectively.

- February growth was mostly driven by Furniture and Home Accessories again while Food, Clothing and Footwear experienced declines on a like-for-like basis.

- Online sales of Non-Food products grew 10.7% in February versus a year earlier, when they had grown 8.3%. The Non-Food online penetration rate remained above 20% at 20.4%, 1.5 percentage points above February 2015.

Helen Dickinson OBE, Chief Executive, British Retail Consortium, said: "After a strong start to the year, February's growth slowed to 1.1 per cent and 0.1 per cent on a like-for-like basis. This fell below the three-month and the twelve-month total averages, both in line at 1.8 per cent.

"February's slowdown was noticeable across all product categories bar Stationery and Health & Beauty, as Valentine's Day provided a welcome growth spurt for those retailers well prepared for the occasion. The fashion categories struggled while some growth was noted in books and vision. Competition remained strong in the grocery sector, while consumers proved willing to spend money on large ticket items, namely furniture, driving the month's performance.

"This slow growth reflects the increasing pressure the industry is under, as highlighted in our recent Retail 2020 report. With the Budget due this month, we encourage the Government to address the cumulative burden that retailers face; enabling growth and protecting jobs and communities."

David McCorquodale, UK Head of Retail, KPMG, said: "The home and the heart drove February's sales growth as home improvement and Valentine's Day campaigns brought their rewards. Furniture was once again the strongest category, helped by a buoyant housing market and promotional activity by retailers in the sector. Jewellers also saw sales sparkle on a romantic revival.

"Stationers performed well during this period, with sales of cards and wrapping paper boosting profits. Unfortunately the "Valentine's effect" did not rub off on food and drink sales, which declined for the second month of the year.

"With the implementation of the National Living Wage only weeks away, all the focus is on promotional activity to drive sales and on productivity to protect margins. With fashion design choices made and an early Easter this year, clothing retailers will be hoping for March sunshine to launch the new season's wares."

Source : BRC

09 March 2016

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