Retail sales weather horse meat storm

Fears the horse meat scandal could damage retailers’ performance have been calmed as the British Retail Consortium reports “neutral” growth in food sales in February and the strongest overall sales growth in three years.

High Street

Comparable food sales were 1 per cent up year on year during the month despite several supermarkets and food brands being hit by findings of horse DNA in processed beef products.

Commenting on the performance in the food and drink sector, Joanne Denney-Finch, chief executive of the IGD, says: “Given the food industry was under such intense scrutiny in February, the sector will be pleased that aggregate sales stood up so well. Although there was a lot of ‘switch buying’, such as a fall in frozen burger sales in favour of more ingredients to cook from scratch, the overall effect on food and drink sales was neutral.”

Overall same store food and non-food sales increased 2.7 per cent during the month compared with February 2012 when sales were down 0.3 per cent, showing that consumers are feeling “more positive”.

Online sales increased 10.9 per cent year on year.

Big ticket items, which have suffered through the downturn, recovered “particularly well” in February according to the BRC but the group sounded a note of caution adding “it’s too soon to assume this represents the permanent turnaround we need”.

Helen Dickinson, director general of the BRC, also urged Government to take steps in next month’s budget to make sure consumers have “more money in their pockets and the confidence to spend it”

She says: “This month’s Budget gives the Government a great opportunity to act to secure real and lasting revival from what could be no more than a short-lived lift.  Retail is central to generating the growth and jobs so critical to the UK’s economic recovery but weak consumer confidence is the real and present obstacle … I hope the Chancellor seizes the moment.”   

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