Retail growth slowed in February, edging up by just 0.5% compared with last year, as Brexit uncertainty continues.
The British Retail Consortium-KPMG retail sales monitor for the four weeks to 23 February showed growth was below the three-month average of 0.9% and 12-month average of 1.2%.
In February, UK retail sales fell by 0.1% on a like-for-like basis from February 2018, when they had increased 0.6% from the preceding year.
Over the three months to 23 February, in-store sales of non-food items declined 2.8%.
Online sales of non-food products grew 5.4% in February, against growth of 6.4% in February 2018.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Uncertainty surrounding the UK’s imminent exit from the European Union has hit consumer spending. While real incomes have started to rise over the past year, shoppers have been reluctant to spend this February, holding back growth. This slowdown was not limited to physical stores, with growth in online non-food sales well below the 12-month average.
“With consumers increasingly aware of the risk of a no-deal Brexit, it is likely that uncertainty has driven this cautious approach to retail spending. If government wishes to reassure both the public and businesses, they should ensure a chaotic no deal – which would lead to higher costs, higher prices, and less choice for consumers – is taken off the table with immediate effect.”
Paul Martin, UK head of retail at KPMG, said: “Following a modest recovery in January, February saw a slowdown in sales. While consumer spending has so far remained relatively resilient, driven by factors such as low unemployment and wage growth, it would seem that continuing political and economic uncertainties are beginning to notably affect shoppers’ spending habits.
“However, the full impact of the recent unseasonably warm weather is yet to be seen, especially for the clothing categories, and online sales growth remained steady.
“Non-food continues to be under more pressure than grocery, with shoppers focusing on the essentials. To manage these dynamics, retailers have to continue managing cost and margin and carefully assess how to gain market share in a broadly flat market.”