British shoppers tightened their belts on food spending last month, leading to a slowdown in retail sales growth following a strong start to the year.

Official data on retail sales volumes remained flat in February, defying economists’ expectations of a 0.4% decline, after experiencing a robust 3.6% expansion in January.

The Office for National Statistics (ONS) reported that sales volumes plateaued as consumers reduced spending on food and fuel, particularly due to the surge in petrol prices during February. However, increased spending on online goods, clothing, and department stores partially offset these declines, resulting in an overall 0.3% dip in average sales over the past three months. Despite this, overall sales volumes remained 1.3% below pre-pandemic levels.

February’s stagnant performance followed January’s exceptional sales, marking the strongest month for the high street in nearly three years and contributing to a monthly economic growth of 0.2%. This performance likely lifted the UK economy out of a brief recession at the beginning of 2024.

Economists had anticipated a decline in retail sales last month, attributing it to adverse weather conditions, including the wettest month on record in parts of England, which deterred shoppers from physical stores. The ONS noted a 1% decrease in monthly sales volumes for household goods, with respondents citing economic conditions and poor weather as contributing factors to the decline.

Consumer spending has been buoyed by a steady decline in inflation, which dropped to 3.4% in February, its lowest level since September 2021. However, interest rates remain at their highest since 2008, with the Bank of England expected to implement its first monetary policy easing in the summer.

Following two years of declining real household disposable income, consumers are expected to benefit from slower price growth, announced cuts to national insurance, and an increase in the National Living Wage to £11.44 for workers aged over 21 starting next month.

Retail sales serve as a crucial indicator of consumer confidence and the overall economic condition, particularly in a services-dominated economy like the UK’s.

Heather Bovill, senior statistician at the ONS, commented, “Retail sales were flat in February. There was growth in clothing and department stores, offset by declines in fuel sales, possibly affected by rising prices, and a reduction in food sales. Many shops reported that in-store sales were impacted by wet weather, with online sales seeing a boost instead.”

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Retail sales stagnate as shoppers cut back on food