Retail sales in the year to February fell at a modest pace following a sharp drop last month, new research has found.

The latest quarterly CBI Distributive Trades Survey said its findings showed that sales were down seven per cent in the year to February versus 50 per cent in the year to January. This marks the slowest decrease in year-on-year sales across a ten-month run of declines.

Noting the slump in retail activity eased in February following an “exceedingly dreary” start to the year, CBI said that sales are expected to continue falling next month and warned that retailers are still planning to reduce headcount and investment going forward.

“Many retailers will expect to see further pressure on their margins due to the upcoming hikes in business rates and the National Living Wage,” said Martin Sartorius, principal economist at CBI. “In the Spring Budget, the chancellor should aim to cap the increase in the England business rates multiplier and work with the devolved administrations to do the same, which would help retailers return to a path to growth.”

Following similar findings by ONS that January figures represented the biggest monthly rise since April 2021, returning volumes to November 2023 levels, Samantha Philips, partner at McKinsey & Company said that the uptick should be “accepted cautiously”, as the UK is expected to experience a year of further ups and downs.

---