Fashion

Brexit uncertainty hits February’s retail growth


The British Retail Consortium has stated that “uncertainty” surrounding
Brexit has hit retail growth for February.

On a total basis, sales increased by 0.5 percent in February, against an
increase of 1.6 percent in February 2018. This was below both the 3-month
and 12-month averages of 0.9 percent and 1.2 percent respectively, and
centres around shoppers being reluctant to spend while Brexit looms.

Helen Dickinson, chief executive of the British Retail Consortium, said
in a statement: “Uncertainty surrounding the UK’s imminent exit from the
European Union has hit consumer spending. While real incomes have started
to rise over the past year, shoppers have been reluctant to spend this
February, holding back growth. This slowdown was not limited to physical
stores, with growth in online non-food sales well below the twelve month
average.

“With consumers increasingly aware of the risk of a no deal Brexit, it
is likely that uncertainty has driven this cautious approach to retail
spending. If government wishes to reassure both the public and businesses,
they should ensure a chaotic no deal – which would lead to higher costs,
higher prices, and less choice for consumers – is taken off the table with
immediate effect.”

Over the three months to February, in-store sales of non-food items
declined by 2.8 percent on a total basis and down by 3.1 percent on a
like-for-like basis. This is below the 12-month total average decline of
2.4 percent.

While online sales of non-food products grew 5.4 percent in February,
against a growth of 6.4 percent in February 2018. This is below the 3-month
average of 5.6 percent and pulls down the 12-month average to 6.9
percent.

Paul Martin, UK head of retail at KPMG, added: “Following a modest
recovery in January, February saw a slowdown in sales. While consumer
spending has so far remained relatively resilient, driven by factors such
as low unemployment and wage growth, it would seem that continuing
political and economic uncertainties are beginning to notably affect
shoppers’ spending habits.

“Across all categories there was sluggish growth…non-food continues to
be under more pressure than grocery, with shoppers focusing on the
essentials. To manage these dynamics, retailers have to continue managing
cost and margin and carefully assess how to gain market share in a broadly
flat market.”



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