Retail sales, Great Britain: February 2019

• In the three months to February 2019, the quantity bought increased by 0.7% when compared with the previous three months, with strong growth in non-store retailing and fuel.

• The monthly growth rate in the quantity bought in February 2019 increased by 0.4%, with a decline of 1.2% in food stores offset by growth in all other main sectors.

• The monthly fall in food stores was the strongest decline since December 2016 at negative 1.5%, reversing the increase of 0.9% in January 2019, with food retailers suggesting that “getting back to normal” following the January sales had contributed to this fall.

• Year-on-year growth in the quantity bought in February 2019 increased by 4.0%, with growth in all main sectors, while the only sub-sector to show a decline within non-food stores was household goods stores at negative 1.3%.

• Online sales as a proportion of all retailing fell to 17.6% in February 2019 from the 18.8% reported in January 2019; this was a year-on-year increase of 9.4% when compared with February 2018.

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the four-week period 27 January 2019 to 23 February 2019.

Unless otherwise stated, the estimates in this release are seasonally adjusted.

Retail sales collects turnover data from retailers, which is money through the till before any deductions, including refunded items. This provides us with the best indicator for consumer spending during the reference period.

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 price changes).

The RSI is an important 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 RSI Quality and Methodology Information report.

In February 2019, estimates for both the amount spent (value) and quantity bought (volume) in retail sales showed growth across all measures (Table 1).

Both the amount spent and the quantity bought in the retail industry showed strong growth of 4.3% and 4.0% respectively in February 2019 when compared with a year earlier. The monthly picture showed moderate growth of 0.6% for the amount spent and 0.4% for the quantity bought. The three-month on three-month movement showed a similar picture, with increases of 0.6% for the amount spent and 0.7% for the quantity bought.

Looking at these measures over time provides a clearer picture as to what is happening in the retail industry (Figure 1).

Figure 1 shows the quantity bought in retail sales over time for both the rolling three-month on three-month and the month-on-month movement.

While both series show a general increase in retail sales, the monthly path shows more volatility than the smoother three-month on three-month series.

Earlier in the series, from February 2016, sales were increasing at a steady rate until late 2016 when a short period of contraction is seen in the three months to March 2017. From April 2017, sales began to recover and increase steadily, albeit at a slower rate. From January 2018, the quantity bought began to level for a short period until May 2018 when a faster rate of growth is seen during the summer of 2018; partly attributed to consecutive months of hot weather as sales in the three months to June, July and August increased by 1.9%, 2.3% and 1.9% respectively.

Following this period of strong growth in the summer months, sales in the retail industry have maintained a higher level than previous years, contributing to the strong year-on-year growth seen in Table 1.

However, the quantity bought in retail sales has slowed from October 2018 onwards, to a moderate increase of 0.7% in the three months to February 2019.

Figure 2 displays the contribution to month-on-month growth, with the amount spent at 0.6 percentage points and the quantity bought at 0.4 percentage points.

Non-food stores was the largest contributor towards the increase seen in February 2019 for the quantity bought and amount spent, both at 0.4 percentage points.

In contrast, food stores was the only negative contributor on the month, with the quantity bought and amount spent contributing negative 0.5 and 0.2 percentage points respectively.

Table 2 shows growth in the quantity bought for both the monthly and the three-month on three-month movement in food stores, along with their respective weight, to the total Retail Sales Index (RSI).

Despite an increase of 0.5% in the three months to February 2019, predominantly food stores reported the largest monthly decrease in the quantity bought at negative 1.2%. This was the largest monthly decline since December 2016 at negative 1.5%. This decline followed two consecutive monthly increases of 0.1% and 0.9% in December 2018 and January 2019 respectively, resulting in an increase in the three-month estimate.

Alcohol stores saw the largest monthly decline in the quantity bought in February 2019 at negative 5.3%; a big contrast to the strong growth of 7.1% in the three-month on three-month movement due to strong growth in the December and January months. Despite the strong monthly fall in February 2019, the smaller weight of 0.7% to total retail sales results in a relatively small contribution to the overall decline.

More money is spent in specialist food stores than alcohol stores, with a weight of 2.1% to total RSI. Specialist food stores also saw a strong decline on the month at negative 3.2%, following strong growth in January 2019, which was the driver to the moderate growth of 0.4% in the three-month on three-month growth rate.

Most money is spent in supermarket stores in comparison with other types of food stores, with nearly 36 pence of every pound spent in these stores. Therefore, despite a smaller monthly decline of 1.0%, this was the largest contributor to the overall fall of 1.2% in predominantly food stores in February 2019. Feedback from supermarkets suggested that the fall was attributed to “going back to normal” as many January sales and promotions, following the festive period, ended in February.

In February 2019, all four main sectors contributed positively to both the amount spent and the quantity bought, resulting in year-on-year contributions of 4.3 and 4.0 percentage points respectively (Figure 3).

Non-store retailing provided the largest contribution to the growth in the amount spent and quantity bought at 1.6 percentage points for both measures.

Table 3 shows the month-on-month and year-on-year growth rates for online retailing, by sector, in addition to the proportion of online sales to all retail sales for non-seasonally adjusted data. The percentage weights indicate where money is spent online.

Online sales increased by 9.4% for the amount spent in February 2019 when compared with February 2018.

All non-food sectors reported falls on the month except other stores, reporting a strong increase of 13.4%.

Online sales as a total of all retailing decreased to 17.6% in February 2019, from the 18.8% reported in January 2019.

The most recent international estimate of retail sales available for January 2019 was published by the US Census Bureau on 11 March 2019. In its advanced monthly sales for retail and food services, January 2019 (PDF, 752KB) 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 (PDF, 509KB) across the European Union on 5 March 2019 for January 2019. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with December 2018.

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.

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 report 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