Supermarkets drive retail sales higher in February

Retail sales volumes picked up in February after growing by 0.8% compared with January, according to the Office for National Statistics (ONS).

Growth, which beat analysts' forecasts for a 0.4% rise, was driven by petrol, supermarkets and online shopping.

ONS senior statistician, Rhian Murphy, said: "Store prices continue to rise across all store types, but at a lower rate than the previous month."

Inflation slowed to a seven-month low of 2.7% in February.

While supermarket sales by value rose by 0.6% in February, trade at non-food shops fell by 0.3%, which the ONS attributed to consumers choosing to spend their money on essential items.

A number of non-food retailers have been facing difficulties recently, including Toys R Us, which has gone into administration, and fashion chain New Look, which is closing 60 UK stores and cutting 1,000 jobs as part of a restructuring plan.

'Champagne remains on ice'

Although sales rose in February, this followed two monthly declines in December and January, and the ONS said this meant sales fell 0.4% in the three months to February.

Ben Brettell, senior economist, Hargreaves Lansdown, said: "The champagne remains on ice for now. The monthly numbers are always volatile and the underlying trend is still one of weakness.

"There's also a risk of further disappointment in March, with the Beast from the East bringing economic disruption and keeping consumers at home."

The Beast from the East has dampened demand for Spring fashion

Sales in February were up by 1.5% compared to the same month last year. This was above analysts' expectations of a 1.3% rise but below the 1.6% annual increase recorded in January.

Keith Richardson, managing director, retail sector at Lloyds Bank Commercial Banking, said it had been a "mixed month" and the Beast from the East delayed the launch of spring ranges "with heavy coats still very much in demand".

Commenting on the outlook for the industry, he said: "Consumers are still being cautious and will only spend if the offer is absolutely right."

He added: "Some retailers with significant physical estates and less successful online operations have closed in recent weeks. Unless shoppers can be persuaded to start spending soon, others may yet follow."