Retail sales in Great Britain fell unexpectedly in February as consumers switched spending to eating out more after the economy reopened, while storms also deterred people from hitting the shops.
Official figures showed that sales fell by 0.3% last month after a 1.9% increase in January. Economists had forecast a 0.6% rise in February.
The figures also suggested the rising cost of living was starting to be felt, with shoppers spending 0.7% more over the month but buying 0.3% fewer goods, as their money failed to go as far as in previous months.
Online retail sales fell 4.8% in February after increases in January and December when Omicron fears prompted people to stay away from the shops. With people venturing out more, the proportion of online retail sales dropped to its lowest level since March 2020, at 22.7%, having peaked in February 2021 at 37.7%.
“After a buoyant January, retail sales fell back a little last month. There was a notable decline for companies that predominantly trade online, following a strong performance over the festive and new year period,” said Heather Bovill, the deputy director for surveys and economic indicators at the Office for National Statistics.
“Food sales dipped with significant falls for alcohol and tobacco stores as more consumers went out to pubs and restaurants. More socialising as well as many of us returning to the workplace meant a good month for clothing and department stores, with people looking to expand their wardrobes.”
Petrol and diesel sales rose above pre-pandemic levels for the first time as the lifting of the government’s plan B restrictions to curb the spread of Omicron fuelled an increase in commuting for work and trips to out-of-town shopping centres.
Clothing sales soared by 13%, while there was a 1.3% rise for department stores, as people updated their casual coronavirus wardrobes for work and wider socialising, pushing overall non-food store sales volumes up 0.6%.
A return to spending in pubs and restaurants led to overall food sales dropping by 0.2%, with a 16% fall at alcohol and tobacco stores, with volumes falling below pre-pandemic levels.
Sales at supermarkets, which have experienced booming food sales during the pandemic, rose by 0.3%. However, there was a 2% fall for specialist food stores, such as butchers and bakers.
While clothing and department stores fared well, sales at other non-food stores fell by 7%, and sales at household goods stores dropped 2.5%. The ONS said feedback from retailers suggested that February’s stormy weather curbed shopping habits.
Britain’s cost of living squeeze intensified last month, with inflation reaching a 30-year high of 6.2% in February, up from 5.5% in January, driven by the rising cost of petrol and diesel and a wide range of goods from food to toys and games.
Emma-Lou Montgomery, an associate director at Fidelity International, said the latest retail sales figures showed “the collective consumer belt-tightening has started to pinch”.
She added: “We face an increasingly tricky financial situation, with rising costs meaning it is going to have to be necessities over ‘nice to haves’ for months to come. And there is little end in sight. Concerns that inflation will go much higher than the initially predicted 8% are rife, further impacting people’s willingness and ability to spend on anything more than the bare essentials.”
