The BRC reported an unexpected 2.7% rise in the value of retail sales in February today, representing the fastest growth since December 2009. Retail Week looks at the implications for the market.

Why are we talking about this now?

The British Retail Consortium (BRC) KPMG Retail Sales Monitor today revealed a surprise increase in sales for February with a 2.7% uplift in like-for-likes and 4.4% increase in total sales. In the same month a year ago like-for-likes were down 0.3%. Excluding distortions caused by the timing of Easter in previous years, total sales grew at the fastest rate since February 2010 at 4.5%. Online sales were up 10.9% over February 2012, when they rose 9.9%.

Is the outlook for retail and the economy more positive?

On the surface a 2.7% uplift suggests a more upbeat outlook for the sector following disappointing figures at the end of 2012. The figures build on a 1.9% rise in January and BRC director general Helen Dickinson welcomed the signs of “gradual improvement and customers feeling a bit more positive”. However, Dickinson cautioned that it is “too soon to assume this represents the permanent turnaround we need” and other indicators suggest the picture may not be as rosy.

Figures released yesterday showed British construction output took its steepest fall in three years in February, according to the Markit/CIPS Purchasing Managers’ Index. Meanwhile, data released last week revealed a shock contraction in British manufacturing In February which instantly dragged the pound below the $1.50 mark – a level not seen since June 2010.

How did non-food categories perform?

A number of sectors enjoyed a much-needed fillip. The electricals sector enjoyed strong growth as sales of tablets, computers and sound and vision products motored and some retailers enjoyed an increase in custom by winning former Comet and Jessops customers. Overall non-food like-for-likes rose 1.9% between December to February.

KPMG head of retail David McCorquodale said sales from fashion to flooring had been positive. Relatively dry, if cold, weather and the occasional day of spring sunshine helped to lift clothing sales as well as drive footfall in the general direction of the department stores, with non-food and furnishing and flooring categories showing strong performances,” he said. However, Debenhams’ profit warning yesterday – attributed to slashing prices after slow sales in January amid snowy conditions – indicated wider conditions have not been favourable for all retailers.

How did food retailers perform?

McCorquodale said food and drink sales were “sluggish” as like-for-likes rose 1%. He cited the horse meat scandal as affecting buying habits as well as strong comparisons a year earlier. Cold weather led to a rise in canned goods and vegetable sales while events including Shrove Tuesday, Valentine’s Day, Chinese New Year and the Six Nations rugby all drove sales.

IGD chief executive Joanne Denney-Finch said shoppers had moved from frozen burger lines to from scratch cooking as a result of the horse meat scandal although its overall effect was “neutral”.