Due to an increase in inflation, the retail industry is suffering a slump in sales and it’s been the worst for nearly seven years.
According to official figures, the sales volume had grew by a better than expected 1.4% in February but the underlying pattern noted to the impact of increased fuel prices and how that was affecting shoppers’ disposable income.
The three months leading up to February showed that sales were down by 1.4% which is the worst decline since March 2010 (according to data from ONS). These figures point to the issues that the high street is facing and come as Next reported that it had it’s first decline in sales since 2009.
Figures from last week show that inflation was at a three and a half year high in February as the collapse of the pound since Brexit has affected import prices.
ONS senior statistician Kate Davies said: “February’s retail sales figures show fairly strong growth, though the underlying three month picture shows falling sales.
“The underlying trend suggests that rising petrol prices in particular have had a negative effect on the overall quantity of goods bought over the last three months.”
ONS data also shows revealed that average prices at petrol stations was up 18.7% in comparison to the same month last year.
Spending by shoppers as remained steady and people are still shopping even though there have been signs of retail sales wilting.
HSBC economist Liz Martins said: “For the optimists, the fact that this bounce was considerably stronger than expected may suggest the slowdown over the winter months was temporary, and the UK consumer remains in good shape.
“For the pessimists, the fact that volumes fell at their fastest three month-on-three month rate since 2010 will put a dampener on the better news.
“We remain cautious.”
Howard Archer, chief UK and European economist for IHS Markit, said: “The economy’s persistent resilience since last June’s Brexit vote has been largely built on consumers keeping on spending.
“With consumers now seemingly moderating their spending, the long anticipated slowdown in the economy looks set to materialise unless other sectors can make significantly increased contributions.”
If you’re looking for help with your shop insurance, then why not contact the team at Todd and Cue on 0191 482 0050.