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UK retail sales stall in February UK retail sales stall in February
(20 minutes later)
Retail sales growth almost stalled in February as consumers cut back on spending, official figures show.Retail sales growth almost stalled in February as consumers cut back on spending, official figures show.
Sales growth slowed to 0.4% last month, the smallest increase since September 1995, according to the Office for National Statistics (ONS). Sales growth slowed to 0.4% last month when compared with February 2008.
Analysts had expected retail sales growth to slow to 2.5%, after a 3.6% rise in January. This was the smallest increase since September 1995, according to the Office for National Statistics (ONS).
Companies such as High Street chain Next have reported falls as price cuts failed to attract consumers. Analysts had the sales growth to slow to 2.5%, after a 3.6% rise in January.
High Street chain Next and others say price cuts have not attracted shoppers.
Snowfall
The heavy snowfall in February, as well the worsening economic climate, hit companies already hurt by the deterioration in shopping last year.The heavy snowfall in February, as well the worsening economic climate, hit companies already hurt by the deterioration in shopping last year.
On a monthly basis, retail sales fell 1.9% from January more than the decline of 0.4% that had been predicted by economists. Sales rose 0.7% in January from December. Retail sales have so far held up much better than many analysts had expected as other parts of the economy have declined.
On Thursday, home improvements retailer Kingfisher said sales in the UK declined by 2.6% to £4.3bn as it closed Trade Depot and Next said revenue and profits declined. [February's figure] ends the recent puzzlingly strong run of figures Vicky Redwood, Capital Economics
Next said that it expected sales to be negative for 2009. On a monthly basis, retail sales fell 1.9% from January, more than the decline of 0.4% that had been predicted.
Sales rose 0.7% in January from December, but textile, clothing and footwear stores reported that sales fell by 3.7%.
On Thursday, home improvements retailer Kingfisher said sales in the UK declined by 2.6% to £4.3bn as it closed its subsidiary Trade Depot.
Next said revenue and profits declined and that it expected sales to be negative for 2009.
Swedish retailer H&M, which has stores on many UK High Streets, reported a 12.6% fall in quarterly profit, blaming currency swings and lower sales.
On Wednesday, the owner of the Zara fashion chain said its profits barely changed during 2008.
Supermarkets
"February's sharp drop in the official measure of retail sales ends the recent puzzlingly strong run of figures and supports the message from the more timely surveys that High Street spending growth is back on a downward trend," said Vicky Redwood, an economist at Capital Economics.
While High Street retailers are reporting weaker profits and cutting back expansion, supermarkets have announced better-than-expected results.
BBC News is tracking where jobs have been created and lost around the UK BBC UK jobs tracker
Supermarket chain Sainsbury's on Wednesday reported that same-store sales increased in the first three months of the year, boosted by its range of cheaper "basics" products.
That followed rival Morrisons, which reported a 7% increase in annual pre-tax profits, and Waitrose, which saw sales touch £4bn for the first time.
The ONS said in Thursday's release that sales at food stores were 4.9% higher for the three months to February than in the same period last year.