A Slow but Steady Climb: UK Retail Sales in February 2025
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- Published: Saturday, 15 March 2025 03:56
The UK retail sector saw a modest but steady growth in February 2025, reflecting a cautiously optimistic consumer landscape. According to the British Retail Consortium (BRC) - KPMG Retail Sales Monitor, total retail sales increased by 1.1% year on year, mirroring the growth recorded in February 2024. While this was a sign of resilience, it fell short of the three-month average growth of 2.4%. However, it remained above the 12-month average of 0.8%, signaling a gradual recovery.
Non-food sales, a key indicator of discretionary spending, remained flat compared to the same period last year. This was a notable improvement from the 2.7% decline seen in February 2024, though it was below the three-month average growth of 2.5%. Over a 12-month period, non-food sales showed a decline of 0.9%, indicating that consumer confidence is still recovering.
Brick-and-mortar stores continued to face challenges, posting a 1.0% decline in year-on-year sales. While this was a slight improvement from the 1.8% drop in February 2024, it remained below the three-month average growth of 0.8%. Despite this, the sector performed better than the 12-month average decline of 1.7%, showing some signs of stability.
On the other hand, online non-food sales emerged as a bright spot, registering a 1.9% year-on-year increase. This marked a strong rebound from the 4.1% decline recorded in February 2024. However, the figure remained below the three-month average growth of 5.3%, indicating that while digital commerce is thriving, it has yet to reach peak momentum. The online penetration rate—the proportion of non-food purchases made online—climbed to 36.4%, slightly up from 35.8% in February 2024 but just shy of the 12-month average of 36.7%.
The slow retail growth in February was partly attributed to poor weather, which dampened demand for fashion products. “Fashion performed poorly due to the gloomy weather throughout the month, but retailers are hopeful the early March sunshine kickstarts spending on Spring and Summer wardrobes,” noted Helen Dickinson OBE, chief executive of the BRC.
Consumers have also become more cautious with their spending, prioritizing savings, travel, and experiences over retail purchases. This shift has contributed to the growing dominance of online shopping, which continues to outpace in-store sales. Linda Ellett, UK head of Consumer, Retail & Leisure at KPMG, highlighted the impact of social commerce on retail, stating, “Online shopping and the growth of social commerce has contributed to a lowering of demand for some physical retail stores. Boardrooms will continue to keep a close eye on monthly footfall and sales data as 2025 progresses.”
The retail sector remains in a state of transition, with digital shopping habits shaping the industry’s future. While physical stores still play a crucial role, businesses are carefully balancing rental costs, employment expenses, and shifting consumer preferences. The coming months will be crucial in determining whether the modest growth seen in February can be sustained or whether economic pressures will continue to weigh on the retail landscape.
As retailers prepare for the spring and summer shopping seasons, all eyes will be on consumer sentiment and whether improving weather conditions and evolving spending habits will provide a much-needed boost to the industry.