Retail saw a ‘more modest growth in February’ – London Business News | London Wallet

Covering the four weeks 02 February – 01 March 2025 total retail sales increased by 1.1% year on year in February, against a growth of 1.1% in February 2024.

This was below the 3-month average growth of 2.4% and above the 12-month average growth of 0.8%.

Food sales increased by 2.3% year on year in February, against a growth of 5.6% in February 2024. This was level with the 3-month average growth of 2.3% and below the 12-month average growth of 2.8%.

Non-Food sales were flat year on year in February, against a decline of 2.7% in February 2024. This was below the 3-month average growth of 2.5% and above the 12-month average decline of 0.9%.

In-Store Non-Food sales decreased by 1.0% year on year in February, against a decline of 1.8% in February 2024. This was below the 3-month average growth of 0.8% and above the 12-month average decline of 1.7%.

Online Non-Food sales increased by 1.9% year on year in February, against a decline of 4.1% in February 2024. This was below the 3-month average growth of 5.3% and above the 12-month average growth of 0.6%.

The online penetration rate (the proportion of Non-Food items bought online) increased to 36.4% in February from 35.8% in February 2024. This was below the 12-month average of 36.7%.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said, “Retail sales saw more modest growth in February. While sales growth across non-food categories was generally muted, it was propped up by online purchases, particularly in computing and electronics.

“Jewellery, watches and fragrance sold well thanks to Valentine’s Day, reversing declines seen last year, and furniture also returned to growth.

“Fashion performed poorly due to the gloomy weather throughout the month, but retailers are hopeful the early March sunshine kickstarts spending on Spring and Summer wardrobes.”

“This weak performance makes many retailers uneasy, especially as they brace for £7bn of new costs from the Budget and packaging levy in 2025, as well as the potential impact of the Employment Rights Bill.

“The industry is already doing all it can to absorb existing costs, but they will be left with little choice but to increase prices or reduce investment in jobs and shops, or both.

“The focus of the Employment Rights Bill should be on unscrupulous employers but instead the industry faces ongoing uncertainty and a trajectory that risks punishing responsible businesses who provide valuable employment, particularly at entry level. It is time for government to course correct to ensure investment and growth are not undermined.”

Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, said, “Consumers remain cautious with their spending and many are continuing to prioritise saving, travel and experiences.

“Nervousness about the economy is deferring other big ticket purchasing, but occasions and offers are still tempting shoppers into some impulsive spending.  Valentine’s, for example, brought a jewellery sales boost to the high street, in what was otherwise a flat month for in-store buying.

“Online non-food sales growth is outpacing in-store and while shops will always be a key part of many retailers’ strategy – rent, rates, and employment costs all must be factored in.

“As we have seen already this year, firms are increasingly scrutinising where best to be located and the implications of the likes of recently announced employment cost rises.  Online shopping and the growth of social commerce has contributed to a lowering of demand for some physical retail stores and boardrooms will continue to keep a close eye on monthly footfall and sales data as 2025 progresses.”

Food & Drink sector performance | Sarah Bradbury, CEO, IGD, said, “Despite upcoming cost challenges, shopper confidence rose to 2 (from -3 in January) due to wage growth and the impending rise in the National Living Wage.

“Early February saw positive retail value sales, likely from Valentine’s promotions, but overall, February’s volume sales dipped. Shopper confidence is expected to remain volatile in response to the external environment.”