Retail sales, Great Britain: February 2017

• Estimates of the quantity bought in retail sales increased by 3.7% compared with February 2016 and increased by 1.4% compared with January 2017; this monthly growth is seen across all store types.
• The underlying pattern as suggested by the 3 month on 3 month movement decreased by 1.4% for the second month in a row; the largest decrease since March 2010 and only the second fall since December 2013.
• Average store prices (including fuel) increased by 2.8% on the year, the largest growth since March 2012; the largest contribution came from petrol stations, where year-on-year average prices rose by 18.7%.
• Online sales (excluding automotive fuel) increased year-on-year by 20.7% and by 3.3% on the month, accounting for approximately 15.3% of all retail spending.

Commenting on today’s official retail figures, Kate Davies, ONS Senior Statistician said:

“February’s retail sales figures show fairly strong growth, though the underlying three-month picture shows falling sales as February's figures follow two consecutive months of decline in December and January. The monthly growth in February is seen across all store types. The underlying trend suggests that rising petrol prices in particular have had a negative effect on the overall quantity of goods bought over the last three months.”

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 29 January 2017 to 25 February 2017. 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 a key 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 Summary Quality and Methodology Information document.

Table 1 shows percentage changes for both the value and volume of sales in February 2017.

When compared with February 2016, the amount spent (value) and quantity bought (volume) in the retail industry showed strong increases. There were also strong increases when compared with January. However, the underlying trend as described by the 3 month on 3 month growth rate has fallen for the second month, following a sustained period of growth in this measure (Figure 1).

In contrast to the strong year-on-year increases seen in overall retail sales, department stores have shown a decline in sales in February 2017.

When compared with February 2016:

• the quantity bought decreased by 1.9%
• the amount spent decreased by 0.7%
• average store price increased by 1.2%

When compared with January 2017:

• the quantity bought increased by 0.3%
• the amount spent increased by 0.3%
• average store price increased by 0.9%

Figure 2 shows the longer-term picture for quantity bought, amount spent and average store price in department stores. Average store prices within department stores are clearly seasonal with regular dips seen around Christmas and summer coinciding with sales.

Looking at the early part of the time series, the amount spent increases at a faster rate than the quantity bought. As the quantity bought is relatively flat, the amount spent increases as a result of an increase in the average price.

From July 2014 to November 2016, the divergence in the amount spent and volume bought suggests that consumers began to buy more products during a period of 29 consecutive year-on-year price falls. January 2017 saw the first fall in year-on-year growth in the quantity bought since April 2013 and the first fall in the amount spent since January 2015, which coincided with a rise in average store price, suggesting that consumers are buying less in department stores as prices increase.

In 2016, for every pound spent in the retail industry:

• 40 pence was spent in food stores
• 42 pence in non-food stores
• 9 pence in non-store retailing
• 9 pence in petrol stations

Using these as weights, along with the year-on-year growth rates, we can calculate how each sector contributed to the total year-on-year growth in the quantity bought.

In February 2017 compared with February 2016, all main retail sectors, except petrol stations saw an increase in the quantity bought (volume) while all sectors saw an increase in the amount spent (value). The largest contribution in both the quantity bought and amount spent came from non-store retailing.

There is general growth seen for most retail sectors, with the exception of department stores and household goods stores. Fuel stores show a slight decrease in the quantity bought, however, the amount spent on fuel remains strong as prices in this sector continue to rise as a main contributor to the upward pressure seen in value sales. This is supported by the latest Consumer Prices Index release.

The monthly picture, as shown in Figure 4, shows all main retail sectors except food stores saw an increase in the quantity bought (volume), while all main sectors showed an increase in the amount spent. The largest contribution for both quantity bought and amount spent came from non-food stores.

February 2017 shows steady growth on the month across all stores, along with rising average store prices. There are notable increases for household goods stores, non-store retailing and fuel stores, contributing to the overall strength for all store types.

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain.

Table 4 shows the year-on-year growth rates for total internet sales by sector and the proportion of sales made online in each retail sector.

In February 2017:

• average weekly spending online was £1.0 billion; an increase of 20.7% compared with February 2016

• the amount spent online accounted for 15.3% of all retail spending, excluding automotive fuel, compared with 13.3% in February 2016

The only international estimate of retail sales available for February 2017 was published by the US Census Bureau on 15 March 2017. In its advanced retail trade estimates for February 2017, 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 3 March 2017 for January 2016. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with December 2016.

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 updated the retail sales and internet sales index categories and their percentage weights.

Economic commentary will be published as part of the short-term indicators theme day on 7 April 2017.

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