London, 2017-Mar-27 — /EPR Retail News/ — As we saw in the BRC-KPMG Retail Sales Monitor figures, the ONS’s Retail Sales index for February showed a pick-up in the growth of the value of sales from January (to 4.2 per cent year on year); although this isn’t anywhere near the level seen in the ONS pre-Christmas boom where we saw year-on-year growth rates of 7 per cent.
These figures are likely to be interpreted as a sign that consumer spending remains relatively unruffled by suggestions that price rises and squeezed real incomes should make them more cautious.
But some care needs to be taken. As in late 2016, small businesses were a key driver of the pick-up in growth in February returning to double digit growth; with the star performers being small online businesses, growing at over 50 per cent! However, the sample used for small businesses, by our estimates, represents just 1 per cent of the small businesses in the UK, although they have a weight of around 20 per cent in the index. Given the small sample size and the fact that it changes in a rolling basis, as you would expect there is considerable volatility in these figures. As a result, we should be careful in taking the small business figures as demonstrative of underlying aggregate consumer spending.
The BRC-KPMG Retail Sales Monitor suggests a slightly different picture. The pick-up in sales growth in February was very small at 0.4 per cent (although it was dampened by the effect of a later Mothers’ Day this year). Although February is not traditionally a month for shopping, as consumers replenish their finances after Christmas, there are signs that shoppers are thinking more carefully than usual about their spending at the moment as prices start to edge upwards and wage growth slows. However, Easter, which falls in April this year, will be the real test of whether the expected slowdown in consumer spending has arrived – being later should work in retailers’ favour, but we’ll have to wait and see.
BRC Press Office
TELEPHONE: + 44 (0) 20 7854 8924
OUT OF HOURS: +44 (0) 7557 747 269