Retail sales in the United Kingdom declined for a second consecutive month in February as consumers remained wary of spending due to unemployment fears and budget uncertainty, a survey by the British Retail Consortium (BRC) showed Tuesday.
Retail sales values fell 0.3 percent on a like-for-like basis from February 2011, when sales had fallen 0.4 percent. On a total basis, sales were up 2.3 percent, against a 1.1 percent increase last year.
Food sales picked up, helped by stocking up in the very cold weather. Non-food weakened further, despite continued promotions and discounts.
Purchases of clothing, footwear and homewares were hit by consumer caution, BRC said. Non-food non-store sales growth slowed further after picking up sharply in December.
"The reality of weak sales shows that a convincing revival remains illusory," BRC Director-General Stephen Robertson said. "Falling inflation has eased the squeeze on household finances and halted the slide in consumer confidence but that's at risk from fuel price rises and Budget uncertainty."
He added that unemployment is expected to rise further causing increased nervousness about job security, which is keeping confidence fragile. "Any sense of improving optimism is not yet translating into more spending."
The official retail sales figures were more upbeat as it showed sales rising at the fastest pace in nine months in January. However, high unemployment and concerns over global economic developments are likely to weigh on consumers' spending intentions.
The unemployment rate hit a 16-year high during the final three months of 2011 and is tipped to go up further in the coming months.
Last month, the Bank of England decided to inject an additional GBP 50 billion into the economy as it continues to face headwinds from both domestic and global economic developments.
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