Supermarkets boosted by customers swapping restaurants for meals at home

Retail spending has risen - but what shoppers are spending money on tells a broader story, as ITV News' Kelly Foran reports

British retailers had a stronger-than-expected month in February as diners skipped restaurant visits and got their food from the supermarket instead.

The Office for National Statistics (ONS) said the soaring cost of living had helped some shops such as discount department stores.

Across the UK retail sector sales volumes rose by 1.2%, a whole percentage point more than the 0.2% experts were expecting.

The ONS also upgraded its January retail figures to 0.9% growth, up from a previous estimate of 0.5%.

(PA Graphics) Credit: PA Graphics

“Retail grew sharply in February with sales returning to their pre-pandemic level,” said ONS director of economic statistics Darren Morgan.

“However, the broader picture remains more subdued, with retail sales showing little real growth, particularly over the last 18 months with price rises hitting consumer spending power.

“In the latest month, discount department stores performed strongly with food shops also doing well as consumers, confronted with cost-of-living pressures, cut back on eating out or purchasing takeaways.

“After rail strikes increased car travel in January, fuel sales fell back in February.”

Sales in food shops rose by 0.9%, the ONS said, while non-food stores jumped 2.4%.

Automotive fuel sales volumes fell by 1.1%, the ONS said.

The amount spent at retailers rose by 6.3% over the last 12 months, excluding petrol and diesel, despite volumes falling 3.3%. That is because prices have increased significantly over the last year.

Lisa Hooker, an expert at PwC, said: “Overall, retail spending appears to be more resilient than many expected at the start of the year.

“While consumers face cost-of-living challenges and interest rate rises, this has been offset to some extent by wage rises and caps on energy prices.

“If, as expected, inflation continues to abate, retailers will be hoping the current sales momentum picks up pace as the year progresses, possibly even in time for May’s Coronation, but certainly towards the end of the year when we expect disposable incomes to start increasing in real terms.”

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know.