Fall in UK non-food sales due to inflation and cautious spending

Retailers have endured their first quarterly fall in non-food sales for more than five years as rising inflation eats into consumer spending, industry figures have shown.

Data from the British Retail Consortium (BRC) and KPMG showed like-for-like non-food sales declined by 0.4 per cent in the three months to February – its first drop since November 2011.

The BRC said like-for-like sales were also down 0.4 per cent last month compared with February last year. But like-for-like food sales lifted by 0.6 per cent in the three months to February, while total food sales grew by 2 per cent over the period.

BRC chief executive Helen Dickinson said "persistent" weak sales across non-food categories pointed to an "undeniable trend" of cautious spending on non-essential products.

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“There was some negative distortion created by the later timing of Mother’s Day this year, which meant that some categories, notably women’s accessories and health and beauty, didn’t benefit from the build-up of gift purchases as they did last year,” she said.

Brexit-induced inflation

Online sales of non-food products recorded its lowest three-month average since the survey began, growing 7.7 per cent in February.

It comes as official figures showed an unexpected fall in retail sales by 0.3 per cent in January, suggesting household spending was being squeezed by Brexit-induced inflation.

Paul Martin, UK head of retail at KPMG, said food sales had continued to "buck the trend", but inflation was hitting retail performance and consumer confidence was showing signs of deteriorating.

Separate figures for Barclaycard showed consumer spending grew by 4 per cent year-on-year in February thanks to the highest-ever increase in essential item expenditure. However, non-essential spending growth slowed for the fifth month on the bounce at 3.5 per cent, as consumers spent less on goods and more on experiences.

Paul Lockstone, managing director of Barclaycard, said: "Consumer spending remained strong in February, but the picture isn't wholly positive. "Rising prices were at least in part responsible for the highest growth in spend on essentials in nearly five years, with the phenomenon of 'shrinkflation', where people get less product for their money, also prompting consumers to row back on some areas of discretionary spending."

– PA