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News - 12 March 2010

Snow proves to be a major disruption for retail

UK retail sales values rose 2.2% on a like-for-like basis from February 2009, when sales had dropped 1.8%, hit by snow and consumer caution. On a total basis, sales rose 4.5% against only 0.1% growth in February 2009.

Food sales slowed further after shoppers had stocked up during January’s snow. Lower food inflation and consumer caution also depressed sales. Non-food recovered, having been hit by January’s snow, but growth was often against larger declines a year ago. Clothing and footwear showed stronger gains than in January and homewares and furniture returned to growth.

Non-food non-store sales (internet, mail-order and phone sales) in February were 15.5% higher than a year ago compared with 14.6% in January. The very cold and wet weather, and shoppers receiving catalogues whose delivery had been delayed by snow, helped to boost sales.

Stephen Robertson, Director General, British Retail Consortium, said, "Despite appearances, these results are not that strong.

"The growth is compared with very weak figures a year ago when February saw the worst of last winter's weather and this February's performance was helped by sales postponed from January – particularly sales of non-food items such as homewares and fashion.

"Consumer confidence is certainly up on this time last year but, with unemployment rising again, spending plans are falling. When the weather-related distortions are stripped away, it's clear customers are still cautious."

Helen Dickinson, Head of Retail, KPMG, said, "Another month of mixed performances. Slowing food inflation hindered growth in value terms, while the expected uplift on a weak snowbound February 2009 duly arrived and the first week of the month saw double digit growth in most non-food sectors. As the month progressed, clothing and footwear, led by men’s and children’s, as well as home accessories and textiles, continued to perform well, as they had done in January. However, other non-food sectors were not so fortunate, highlighting the difficulties in enticing discretionary spending given the political and economic uncertainties ahead. The consumer remains cautious and confidence fragile."

Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said, “In February grocery retailers set out highly competitive promotions focused, above all, on Valentine’s Day. However, falling levels of inflation contributed towards slower growth in food and drink sales values over the month, with volumes remaining robust.

"IGD consumer research suggests that in-store promotions can be more effective with shoppers than television or magazine advertising. More than a third, 37%, of shoppers say that promotions in supermarkets tempt them to try a new product, compared with 29% for advertising.”

Non-Food Non-Store* - Sharon Hardiman, Head of Non-Store Retailing, BRC, said,

"This is good growth. Slightly up on January and up on February a year ago. Some of it was a catch-up on sales held over from the previous month, particularly where catalogues were late reaching customers. Promotions and clearances helped but also the range of goods and retailers available online is still expanding and customers are steadily becoming more comfortable with this way of shopping.

"Non-store retailing is only a small corner of overall retailing, taking just over a twentieth of total spending. The internet is not immune from the current uncertainty but the negative effects are outweighed by its continuing march forward."


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