PwC comments on Feb 2024 retail sales figures

Lisa Hooker, Leader of Industry for Consumer Markets comments on the ONS retail sales figures for February 2024:

Little surprise that retail sales were unable to continue the momentum of the apparent bounceback witnessed in January’s numbers following a lacklustre Christmas. Headline retail sales for February were flat compared with January in volume terms, and still 1.3% below pre-pandemic levels, while pounds in the till continued to be flattered by inflation, albeit to a lesser extent as CPI fell to 3.4%. 

Grocery sales slowed slightly from the previous month’s highs, as more people ventured back to eating and drinking out after Dry January. Meanwhile the wetter and milder February also helped clothing retail sales growth with new season’s stock doing particularly well. Fashion, along with health & beauty, has proven to be consistently one of the more resilient categories in recent months, as disposable income has been diverted from categories such as home and DIY which are traditionally stronger at the start of the year. Albeit all categories are seeing increased volatility of performance week on week.

The wetter weather also helped online growth, with penetration increasing to 25.7% from January’s now re-stated low of 25.1%. After the post-pandemic normalisation of online sales. This suggests that online is now back to the relative long-term growth trend that has driven the net closure of retail outlets we uncovered in our most recent store openings and closures research.

Overall, February’s retail sales figures confirm that, despite falling inflation, a 2% cut in national insurance at the start of 2024, and improving consumer confidence in their personal finances, shoppers are still hesitant to part with their hard-earned cash.

With inflation forecast to fall to the Bank of England’s 2% target in April, in addition to a 9.8% rise in National Living Wage and a further 2% cut to national insurance, retailers will be hoping that the Spring brings green shoots after a challenging last 18 months.