Published on March 5th, 2019 | by The GC Team0
Fear of no-deal Brexit puts brakes on retail spending
Figures released today by the British Retail Consortium and KPMG show that UK retail sales decreased by 0.1% on a like-for-like basis in February, against an increase of 0.6% on the same period last year.
The decline follows a modest recovery in sales in January as the first week in particular was lifted by consumers taking advantage of New Year discounts.
BRC Chief Executive Helen Dickinson put February’s decline down to “Uncertainty surrounding the UK’s imminent exit from the European Union.”
With consumers’ increasing awareness of the risk of a no-deal Brexit, Dickinson said it is likely that uncertainty had driven a cautious approach to retail 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 twelve-month average.”
Online sales of non-food products grew 5.4%, against growth of 6.4% in February 2018. The 12-month average stands at 6.9%.
“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,” said Paul Martin, UK Head of Retail at KPMG.