UK retail sales fell in February 2024 but the pace of decline eased during the month, according to the latest quarterly distributive trades survey by the Confederation of British Industry (CBI).
The drop rate was 7%, a significant improvement from the 50% recorded in January. It is the slowest decline in year-on-year sales in the current ten-month period of contraction.
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Retailers reported that sales in February aligned closely with the average for the time of year, a notable recovery from January’s figures which were well below seasonal norms.
Expectations for March suggest that sales will again fall below seasonal averages at 9%.
Internet retail sales saw an increase for the first time in eight months, with 4% growth.
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This contrasts with the overall decline in total sales. Internet sales are anticipated to grow at a much faster rate of 37% in March.
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By GlobalDataSelling price inflation in February eased to its lowest point since mid-2021 with a 54% increase, down from 73% in November.
But inflation rates remain above the long-run average of 42%. Retailers expect similar growth in selling prices in March.
The retail sector’s employment continued its downward trend, with a 19% decrease in February – the sixth consecutive quarterly survey to report a fall.
But despite the ongoing challenges, retailers’ investment plans have shown a slight improvement.
CBI principal economist Martin Sartorius said: “The slump in retail activity eased in February following an exceedingly dreary start to the year. Nevertheless, with sales expected to continue falling next month, retailers are still planning to reduce headcount and investment going forward.
“Many retailers expect to see further pressure on their margins due to the upcoming hikes in business rates and the National Living Wage. In the Spring Budget, the chancellor should aim to cap the increase in the England business rates multiplier and work with the devolved administrations to do the same, which would help retailers return to a path to growth.”
