MNI REALITY CHECK: UK Feb Sales To Jump After Jan Plunge

UK retail sales rose modestly in February from depressed January levels, according to industry insiders, with clothing sales finally showing some signs of life. City forecasters expect a healthy monthly rise in volumes, consistent with reports from top retailers, which will leave sales around 3.5% below year-ago levels.

Total sales could only go one way after January's 8.2% plunge, despite the continued closure of non-essential retailers through February. The January retreat pushed the index of chained volume sales down to 96.9, the lowest since May, making for an easier comparison for upcoming February data.

Supermarket sales accelerated in February, with Kantar reporting the fastest pace of growth since June, when supermarket sales surged by an annual rate of more than 6%.

"Various hospitality restrictions mean that we've eaten an extra seven billion meals at home since spring 2020. Overall, shoppers have spent £15.2 billion more on groceries during the pandemic, an increase of £500 [per household] compared with normal times," Kantar's Fraser McKevitt told MNI.

Susan Barrat, CEO at retail analysts IGD also saw a strong February for food retailers, "continuing to benefit from the ongoing closure of non-essential retail … furthermore, sales were boosted by Valentine's Day as shoppers splashed out on treats and gifts."

Food and drink will face much tougher year-on-year comparisons from March, after a surge in spending in the early months of lockdown in 2020.

CLOTHING PICK-UP

Clothing -- which accounted for 11.4% of total sales before lockdown -- increased, albeit from depressed levels, after Boris Johnson's roadmap out of lockdown on 22 February reminded consumers of a life after loungewear. Retailers also reported increased demand for back-to-school items, such as shoes. Online clothing sales surged by close to 47% in the final week of the month.

"The Prime Minister's roadmap to reopening prompted a burst in spending on non-food items, such as school uniforms … online sales were high, rewarding the retailers who have invested digitally," according to Helen Dickinson, chief executive at the British Retail Consortium.

ONLINE SALES

Internet sales remained robust, but growth likely short of January's 73% annual pace. However, bricks-and-mortar outlets that invested in online sales channels through the pandemic continue to steal market share from internet-only retailers, suggesting some respite for department stores after a 15% monthly decline in January.

"Consumers continued to nest down for further weeks at home, with food and drink, technology, furniture and home accessories recording strong growth both online and on the high street. Online channels recorded strong sales across all categories, with some even registering triple figure growth," KPMG head of retail Paul Martin told MNI.

The better weather in February also helped sales, along with the ongoing vaccine rollout. "People feel a lot safer now and less wary of going out. Footfall has been increasing at a faster pace now than in the first lockdown," Andrew Goodacre, CEO at the independent retailers association said.

The better month all around was best summed up by Ben Jones, the lead economist at the CBI.

"With lockdown measures still in place, trading conditions remain extremely difficult for retailers. Record growth in internet shopping suggests that retailers' investments in online platforms and click-and-collect services may be paying off," he said.

Analsyts are forecasting growth of 2.1% according to the median of a survey of opinions.