Retail sales, Great Britain: February 2018

• In February 2018, the quantity bought in retail sales increased by 0.8% when compared with the previous month, with increases seen across all main sectors except non-food stores.

• The monthly increase to the quantity bought follows two monthly declines in December and January, resulting in an overall decrease of 0.4% in the three months to February.

• The year-on-year growth rate increased by 1.5% following a general slowdown when compared with an increase of 3.3% in February 2017; however, this stabilised in recent months as we see little movement in the year-on-year growth since November 2017.

• While we continue to see price increases across all sectors, there is a slowdown to growth in the last two months, falling from 3.1% in December to 2.5% in February.

• Internet sales saw an increase in its proportion of all seasonally adjusted retailing in February when compared with January, accounting for 17.2% of all retail; this continues the general upward trend in money spent online as the proportion of online spending in February 2017 was at 15.6%.

Commenting on today’s official retail figures, Rhian Murphy, ONS Senior Statistician said:

"Retail sales did grow in February, with increases seen in food, non-store and fuel, but this followed two months of decline in these sectors.

"However, the underlying three-month picture is one of falling sales, mainly due to strong declines across all main sectors in December.

"Store prices continue to rise across all store types, but at a lower rate than the previous month due to a slowdown in price growth, though clothing and household goods stores continued to see stronger price rises."

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 28 January 2018 to 24 February 2018.

Improvements to the deflators derived from consumer price inflation data have resulted in negligible revisions to total retail sales from 2012 onwards. Please note that these changes do not impact the results published in the consumer price inflation statistical release.

Unless otherwise stated, the estimates in this release are seasonally adjusted.

The Retail Sales Index (RSI) measures the value and volume of retail sales in Great Britain on a monthly basis. Data are collected from businesses in the retail industry and the survey’s results are used to produce seasonally adjusted monthly, quarterly and annual estimates of output in the retail industry at current price and at chained volume measures (removing the effect of inflation). Unless otherwise stated, all estimates included in this release are based on seasonally adjusted data.

The RSI is an important economic indicator and one of the earliest short-term measures of economic activity. It is used in the compilation of the national accounts and widely used by private and public sector institutions, particularly by the Bank of England and Her Majesty’s Treasury to assist in informed decision- and policy-making.

Summary information can be found in the RSI Quality and Methodology Information report.

In February 2018, estimates for both the quantity bought (volume) and the amount spent (value) in the retail industry grew by 1.5% and 3.9% respectively when compared with a year earlier (Table 1). The monthly picture showed an increase of 0.8% for both the amount spent and quantity bought, while the amount spent in the three-month on three-month movement increased by 0.4%. The quantity bought in the three months to February provided a different picture with a decline of 0.4%, coinciding with continued rising food store prices.

Looking at these measures over time provides a clearer picture as to what is happening in the retail industry (Figures 1 and 2).

Figure 1 shows the volatility in the monthly index against the more stable rolling three-month on three-month movement.

The monthly growth rate of 0.8% in February 2018 followed two monthly declines in December and January, resulting in an overall decrease of 0.4% in the three months to February.

Growth in retail sales has slowed in recent months when compared with the strong growth seen at the beginning of the series between February and November 2016. After a short period of contraction from January to March 2017, the general upward trend continued, albeit at a slower rate. In recent months, however, the quantity of goods bought shows a decline in the rolling three-monthly series.

The slowdown in growth can also be seen with the year-on-year growth rates in Figure 2.

While we continue to see a growth of 1.5% in February 2018, there is a clear slowdown when compared with the earlier periods shown, as the growth rate was at its highest in October 2016 at 7.3%. A general downward trend followed the strength seen throughout 2016, but this stabilised in recent months as we see little movement in the year-on-year growth since November 2017.

Figure 3 shows month-on-month growth in the retail sector for both the amount spent and quantity bought at 0.8 percentage points for both measures.

Non-food stores were the only main sector to show a decrease in contributions to the overall growth for both the quantity bought and amount spent when compared with January 2018. It was down 0.3 percentage points for both measures as consumers instead spend on essential items.

Non-store retailing reported the largest increase in contributions to the quantity bought at 0.5 percentage points, while food stores were the largest contributor to the growth in the amount spent at 0.6 percentage points.

Figure 4 shows year-on-year growth in the retail sector for both the amount spent and quantity bought at 3.9 and 1.5 percentage points respectively.

The main contribution to growth came from non-store retailing, providing a positive contribution of 1.4 percentage points in the amount spent and 1.2 percentage points in the quantity bought.

The only negative contribution to year-on-year growth was in the quantity bought from food stores at negative 0.2 percentage points; a possible consequence of continued rising store prices (Figure 5).

February 2018 was the seventh consecutive monthly decline for the year-on-year growth rate in the quantity of food bought. This downward trend has coincided with increases in food store prices.

While prices continue to rise, there is a notable slowdown in February 2018 to 2.9%, which contributed to the overall slowdown to the average store price (Figure 6).

Store prices continue to rise for the 16th consecutive month when compared with the same month a year earlier (Figure 6). However, we see a slowdown to growth in recent months; slowing to 2.5% in February compared with when it was at its highest in September 2017 at 3.3%.

While we continue to see price increases across all sectors, clothing and household goods stores were the only sectors to show an increase to price growth when compared with the previous month (Figure 7). All other sectors showed a reduction to the growth in store prices, except for total non-food stores, which remained unchanged.

Internet sales saw an increase in its proportion of all seasonally adjusted retailing in February 2018 when compared with January 2018, accounting for 17.2% of all retail (Table 2). This continues the general increase in money spent online as the proportion of online spending in February 2017 was at 15.6%.

The year-on-year increase of 13.7% in total online retailing continues the pattern of growth in the sector albeit at a slower pace than reported in late 2016. All four main sectors reported year-on-year growth in February with food stores reporting the largest growth of 14.0%.

Average weekly spending online increased in February to £1,230.2 million compared with the £1,193 million reported in January, continuing the growth seen online.

The only international estimate of retail sales available for February 2018 was published by the US Census Bureau on 14 March 2018. In its advanced monthly sales for retail and food services, January 2018 they include the amount spent in the US retail industry, including motor vehicles and parts and food services.

Eurostat also published their latest estimates of the volume of retail trade across the European Union on 05 February 2018 for December 2017. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with November 2017.

Data for Northern Ireland are published by the Northern Ireland Statistics and Research Agency (NISRA).

It should be noted that accurate comparisons cannot be made against these or other international statistics due to a variety of reasons, including differences in methodology.

We have published a methodology article alongside this release relating to the differences with our main external source for comparison, the British Retail Consortium (BRC).

Our Monthly Business Survey (MBS) for retail sales measures output from the retail industry in Great Britain. It samples 5,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month.

Further qualitative data or information and summary tables can be found in the attached datasets. This includes data on:

• response rates
• standard errors
• revision triangle
• distribution analysis

The Retail sales Quality and Methodology Information document contains important information on:

• the strengths and limitations of the data and how it compares with related data
• uses and users of the data
• how the output was created
• the quality of the output including the accuracy of the data