The latest figures from the Office for National Statistics (ONS) reveal a 3.1% increase in retail sales by value for February 2025, while sales volumes experienced a slight decline of 0.5%.
Kris Hamer, Director of Insight at the British Retail Consortium (BRC), attributed the mixed performance to the exceptionally wet weather during the month, which dampened consumer demand and reduced footfall.
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High-ticket items such as furniture and electrical goods were particularly affected, whereas cosmetics and toiletries saw continued strong sales, bolstered by the popularity of leading brands.
Weather dampens retail performance
February 2025 was marked by record rainfall, leading to decreased consumer activity in physical stores.
This adverse weather particularly impacted sales of higher-priced items, including furniture and electronics.
Conversely, sectors like cosmetics and toiletries maintained robust sales, benefiting from sustained brand popularity.
Retailers face rising operational costs
Beyond weather-related challenges, UK retailers are confronting significant cost increases.
In April, business rates are set to rise by 6.7%, adding to financial pressures. Additional costs stem from new recycling regulations and border control measures.
Furthermore, the National Living Wage is scheduled for its largest increase on record, exacerbating the financial strain on businesses.
Employment Rights Bill introduces further uncertainties
The proposed Employment Rights Bill introduces additional uncertainties for retailers.
The legislation aims to ban exploitative zero-hours contracts, end ‘fire and rehire’ practices, and grant basic employment rights from day one, including protection against unfair dismissal and rights to parental and bereavement leave.
While the bill seeks to enhance worker protections, business leaders have expressed concerns about its potential impact on operational flexibility and increased costs.
Critics argue that the bill could discourage hiring and negatively affect wages, productivity, and the entrepreneurial spirit.
Kris Hamer emphasized the need for government action to address these rising costs and policy uncertainties, highlighting that without intervention, the financial burdens could hinder investment in retail spaces, job creation, and ultimately lead to higher prices for consumers.
