The slowdown in February was felt across most sectors, with the exception of grocery and jewellery. Both managed to maintain and improve their growth rates respectively, with the latter benefitting from a stronger appetite for Valentine’s Day spending this year compared to 2013. The clothing and food and drink sectors were also boosted by amorous British shoppers but still felt the effect of the overall slowdown.
It is perhaps unsurprising that the grocery sector is keeping a steady pace of growth in the UK. Consumers are still keeping a tight reign on their purses, spending money on essentials and small luxuries or treats for celebratory moments or seasonal calendar dates such as Valentine’s Day. What is missing for the UK retail market is a boost to discretionary spending – the big ticket items whether that’s a new Smart TV or booking a summer holiday. Consumers are not confident that they can afford it – house prices might be up but it’s clear that people aren’t furnishing their homes as they may have done prior to the recession.
Whilst a responsible approach to spending and saving is certainly a wise decision for consumers, for the retail sector to return to a steady growth curve in 2014, we need to see a balance of spending between everyday essentials and longer term discretionary purchases. This is dependent on consumer confidence in the UK recovery. Shoppers need to see tangible impact – one that puts more money into their pockets. With spring’s warmer weather just around the corner to add a brighter boost to the retail sector, the next few months will be pivotal for the UK to get back on the path to consistent and solid growth.