February retail sales up marginally

February retail sales up marginally

	Published : Fri, 17 Mar 2006 08:45 By : Andrew Stead Print this Story

LONDON: Retail sales on the high streets showed signs of marginal growth in February but not enough to indicate any major recovery. Added to this is the fact that January's substantial decline was sharper than reported earlier.

The Office for National Statistics said February sales rose 0.5 per cent, which helped the annual rate to go up to 2.1 per cent. But, sales in January have actually fallen by 1.6 per cent instead of 1.3 per cent reported earlier. This will mean that but for an unexpected large growth in March, retail sales will fall in the first quarter.

The underlying rate of retail sales growth has slowed further in February, in contrast with a faster growth recorded at the end of last year, as the quarterly rate slowed to 0.5 per cent from 1.3 per cent, its weakest in five month, according to the ONS.

The ONS data showed that sales of textiles, clothing and footwear grew 3 per cent in February but this has been mainly on account of weak performance in these in the previous two months. In other words, it has just brought the sales back to normal.

Sales in household goods stores fell 1.1 per cent. Food stores saw growth of 0.2 per cent and non-food sales 0.4 per cent. The sharpest growth was enjoyed by non-store retailers -- 3.4 per cent -- mostly because shoppers have been doing their purchases through specialist internet retailers.

The ONS said overall prices were 1.1 per cent lower than a year earlier based on old data, and this may change once the February inflation figures are available.

The ONS maintained that the actual level of sales was lower than in November 2005 saying there is nothing much to talk about the 0.5 per cent gain month-to-month.

The Bank of England is depending on higher spending by consumers, who account for two-thirds of the economy, to create some growth after the weakest performance in 13 years in 2005. The bank had predicted in February that a "steady expansion" in consumer spending will lift economic growth to at least 2.7 per cent this year from 1.8 per cent in 2005, and inflation will remain near the 2 per cent target.

The economy actually grew 0.6 per cent in the fourth quarter, the fastest rate in a year due to higher household spending and an expansion in services. House prices in the country too increased at the highest rate in more than 18 months in February, according to the Royal Institution of Chartered Surveyors.

The bank has put forth figures indicating consumer debt in the country has reached a record 1.17 trillion pounds in January, while credit-card borrowing more than tripled to 733 million pounds.