February sees pick-up in food sales

08 March, 2012

Food sales performed better in February compared to the previous month, with UK retail sales up 2.3% on a total basis.

The British Retail Consortium (BRC) published the latest retail sales values, which highlight a 0.3% drop on a like-for-like basis from February 2011, when sales had fallen 0.4%.

However, Stephen Robertson, director general of the BRC, said: “The reality of weak sales shows that a convincing revival remains illusory. Falling inflation has eased the squeeze on household finances and halted the slide in consumer confidence, but that’s at risk from fuel price rises and budget uncertainty.

“Total sales growth is still below inflation, so overall, customers are actually buying less than a year ago, while discounts are eating into margins. Food picked up, but non-food sales deteriorated, with goods affected by the slow housing market among those particularly struggling.

“In this climate of continued caution, the Chancellor must use the Budget to hold back business costs, which will support jobs, growth and the much-needed consumer turnaround.”

Promotions and discounts were unable to help the sales of non-food products, with clothing, footwear and homewares not performing as well last month compared to January and December.

The growth in sales for non-food and non-store categories, such as internet, mail-order and phones, slowed further after picking up sharply in December. Sales were 9.9% up on a year ago, down from 11.3% in January and 18.5% in December and also below the 10.4% in February 2011.

Helen Dickinson, head of retail, KPMG, said: “February’s results were similar to January’s, but with very different dynamics. Food performed better than in the previous month, but many non-food sectors struggled. The timing of half term caused plenty of variability during February and swings in performance by individual retailers makes business planning all the more challenging.

“Consumers remain reluctant to spend unless encouraged by promotional activity. Thus, while the market is still growing slightly in headline sales terms, profitability continues to be eroded through loss of margins.

“Many retailers feel they're fighting very hard just to stand still at best and don’t see any light at the end of the tunnel. However, there are retailers out there who deliver what the customer wants and needs – in terms of product, brand and price – which proves that if the proposition is spot-on, it is still possible to outperform the market and the competition.”





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