March 24, 2023 07:32 GMT
Robust February Retail Sales Again Boosted by Discounts
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Retail sales jumped +1.2% m/m in February, against expectations of a weak +0.2% m/m uptick. This was the strongest M/M growth since Oct '22 and back around pre-pandemic February 2020 levels.
- Following the upwardly revised +0.9 m/m rise recorded in January, an ONS spokesperson confirmed that any March reading above -1.7% m/m would imply a positive contribution to Q1 GDP.
- Non-food sales jumped +2.4% y/y, underpinned by strong discount store and second-hand/auction house sales.
- Food store sales rose again, albeit according to anecdotal evidence this was at the cost of reduced spending in restaurants and takeaways, signalling a likely softening in restaurant services activity in February.
- All up, despite this data showing robust spending in February, the shift away from new and full-price goods implies that underlying demand remains severely affected by persistently high inflation. Yet a continuation of the recent discounting trend is a tentative signal for cooling inflation.
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