Retail sales volumes were down by 0.3 per cent in February following a rise of 1.9 per cent in the previous month, according to the latest ONS retail figures.

But sales during the month were 3.7 per cent above their pre-pandemic February 2020 levels.

Non-store retailing sales dropped by 4.8 per cent during the 4-week period, following strong growth in the previous two months – 2.7 per cent for December and 4 per cent for January.

Overall sales volumes in this category were 33 per cent higher than pre-covid levels.

Food stores also saw sales decline by 0.2 per cent last month, with large falls in alcohol and tobacco stores, which ONS suggested could be linked to higher spending in pubs and restaurants as confidence increased in going out.

Food store sales volumes were 0.1 per cent below pre-coronavirus February 2020 levels.

“Sales growth fell slightly in February as rising concerns about inflation appeared to dampen consumer appetites,” said Helen Dickinson, chief executive, British Retail Consortium (BRC).

Dickinson added that as competition for limited consumer spend increases, retailers need to invest in their physical and digital offerings.

“Consumers face a rocky road ahead, with rises in the energy price cap and NI contributions both coming next week,” explained the chief executive. “Meanwhile confidence has been knocked by the continued rise in inflation, as well as the uncertainty created by the situation in Ukraine.

“While the Chancellor’s Spring Statement offered some relief for consumers, rising inflation and next week’s rise in the energy price cap mean that real discretionary incomes are likely to fall in the coming months, as the cost of living soars.”

Non-food store sales increase

According to the research, non-food store sales increased by 0.6 per cent last month, with growth in clothing up 13.2 per cent and department store sales experiencing a 1.3 per cent hike. This was likely driven by more socialising and the return to the office following the lifting of Plan B restrictions at the end of January.

But these increases were partially offset by falls in other non-food stores – which saw sales drop by 7 per cent – and household good stores who saw sales decline by 2.5 per cent. ONS said some retailers suggested that stormy weather had impacted footfall.

Online retail sales

The ONS results show that the proportion of retail sales online fell to 27.8 per cent in February 2022, its lowest proportion since March 2020 - when e-commerce made up 22.7 per cent. This reflects a "broad downward trend" since its peak of 37.7 per cent in February 2021

“Inflation driven by the post-pandemic recovery continues to accelerate and is set to climb higher on the back of a number of factors, including the economic impact of the war in Ukraine," commented Silvia Rindone, EY UK&I retail lead. "Consumers are expecting a difficult time in the months ahead and are making considered decisions about how to spend their money.

"For now, long-awaited holidays and getting out and about to enjoy experiences and hospitality seem to be a priority for some, with many UK consumers able to tap into savings built up during the pandemic. But, over the course of the year, we expect to see a general switching of non-discretionary spend to lower cost alternatives, with the more expensive options kept as treats for special occasions. We also expect higher-value discretionary spend to fall."

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