Reaction to today’s ONS retail figures

There was a little bit of optimism in both the non-retail and fuel sectors but food stores took a little bite.

The key findings from the Office for National Statistics showed:

  • In the three months to February 2019, the quantity bought increased by 0.7% when compared with the previous three months, with strong growth in non-store retailing and fuel.
  • The monthly growth rate in the quantity bought in February 2019 increased by 0.4%, with a decline of 1.2% in food stores offset by growth in all other main sectors.
  • The monthly fall in food stores was the strongest decline since December 2016 at negative 1.5%, reversing the increase of 0.9% in January 2019, with food retailers suggesting that “getting back to normal” following the January sales had contributed to this fall.
  • Year-on-year growth in the quantity bought in February 2019 increased by 4.0%, with growth in all main sectors, while the only sub-sector to show a decline within non-food stores was household goods stores at negative 1.3%.
  • Online sales as a proportion of all retailing fell to 17.6% in February 2019 from the 18.8% reported in January 2019; this was a year-on-year increase of 9.4% when compared with February 2018.

Phil Mullis, Partner and Head of Retail and Wholesale at leading accountancy firm, Wilkins Kennedy, said: “Despite the continued uncertainty with Brexit, consumers have been reasonably resilient throughout February and seem to be just getting on with it.

“From a retailers’ perspective it is evident they are continuing to make plans and create strategies for dealing with Brexit. My clients have been changing supply chains but retailers are still demanding certainty across every aspect of their operations. Consumers may be bored by Brexit but retailers want certainty so that they can plan.

“February is always driven by Valentine’s Day for retailers and there was a slight uptake in inflation but the amount of food we have bought has dipped so we may be trying to tighten our belts.

“It is interesting that the quantity of alcohol that was sold in February fell. I would have expected that in ‘dry January’ and then an increase last month. It is always difficult to predict a trend from one or two months data but it may indicate that consumers are choosing more healthier lifestyles.

“Even though online sales as a proportion of retail fell, which surprised me, overall the continued dichotomy between people heading to the High Street and buying online continues.

“Discounting has reduced following the Christmas and January sales so clothes in particular are returning to their normal prices, and it will be interesting to see next month’s figures as talks remain over the UK’s exit from the EU and whether we are any further forward in reaching a conclusion.”