ONS: UK retail sales fall in February

Retail sales fell last month - by a bigger than expected 0.8% on a monthly basis, the Office for National Statistics (ONS) has reported today.

The fall followed a downwardly revised gain of 1.5% in January. Sales growth for January was attributed to heavy discounts and a rush to beat the VAT hike, which came into effect on the 4th.

On an annual basis, meanwhile, sales were 1.3% higher - again less than analysts forecast for a rise of 2.3%.

According to the ONS, the only two sectors to record sales growth in February were automotive fuel and non-store retailers.

Earlier this week, the ONS announced Consumer Price Inflation (CPI) rose to an annual rate of 4.4% in February – the highest rate since October 2008.

Rising inflation means consumers are facing higher prices.

Consumer spending is expected to continue to take a knock in the face of higher inflation, uncertainty surrounding the economy and muted wage growth.

In related news today, Next, which is Britain’s second largest fashion retailer, said consumers are tightening their purse strings in the face of soaring inflation and Government spending cuts.

The retailing giant announced record profits but has warned of challenging times ahead for the High Street.

Yesterday, supermarket giant Sainsbury’s posted slower growth, which it attributed to consumers cutting back on their spending.

Discuss this in the Finance Markets forums

Story link: ONS: UK retail sales fall in February