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Economy

Mild February fails to significantly boost UK retail spending

The total retail spend index in February rose only 3.4 percentage points (ppts) versus a poor performance in January, according to data and analytics company GlobalData.

Analysts said this subdued growth was “especially disappointing” in light of the UK experiencing the hottest February on record, which should have driven sales.

The company’s latest report: ‘Retail Trend Tracker: UK Consumer Spend – February’ revealed that continued Brexit uncertainty constrained consumer spending.

Analysts expected the unseasonably warm weather throughout the majority of February to provide a boost to clothing and footwear spending as consumers could have been persuaded to purchase new season stock. However, the clothing in-store retail spend index fell as footfall remained subdued and a better performance online was not enough to create significant growth versus January. Additionally, the prolonged period of discounting, which many clothing retailers participated in at the start of 2019, may have dampened demand.

Emily Salter, retail analyst for GlobalData, said: “Online spending decreased slightly versus January, but growth remained higher than that of in-store spending as physical locations struggled to generate footfall, despite the February half term holiday and mild weather.

“These two factors did, however, lead to increased leisure spend; contributing to a 7.3 ppt boost to the leisure spend index versus January.”

Salter added: “Looking ahead, consumers are feeling increasingly negative, in particular about the economic outlook and their personal finances with the future sentiment index declining on last month. This is driven by Brexit uncertainty, despite the UK being only weeks away from the official exit date, with consumers likely to be less willing to spend on non-essential retail items.”

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