UK retail activity softened in February, reversing some of January’s strongest momentum in more than a year, as official data pointed to weaker demand and economists warned that higher oil prices linked to the Iran conflict could weigh further on spending in the months ahead.
The Office for National Statistics said retail sales volumes fell 0.4% month on month in February. The decline was milder than the 0.7% drop forecast in a Reuters poll, but it followed an upwardly revised 2.0% increase in January—January’s biggest monthly rise since May 2024. On a year-on-year basis, growth slowed to 2.5% in February from 4.8% in January.
ONS cited unusually wet weather as a factor that kept some shoppers at home and contributed to a weaker trading month. The data showed monthly declines across several everyday categories, including automotive fuel, clothing, food and household goods—an important detail given that these segments typically provide a clearer read on consumer confidence than discretionary “one-off” purchases.
That confidence appears to be under pressure. Surveys show UK consumer sentiment has deteriorated since US-Israeli strikes on Iran on February 28, with oil prices rising by roughly 50% over the period. While sentiment gauges vary in the size of the drop, the broader direction suggests households are becoming more cautious—raising the risk that UK retail sales February is an early sign of a tougher spring.
Accenture warned that retailers may be heading into the new season facing both demand uncertainty and rising cost pressures tied to energy. “Retailers will now be facing into the spring season with growing trepidation. The conflict in the Middle East is likely to push up input and fuel costs for businesses and consumers alike,” said Matt Jeffers, managing director for retail strategy in the United Kingdom and Ireland at consultants Accenture.
Further evidence of weakening mood came from GfK, the UK’s longest-running consumer confidence survey, which on Friday reported sentiment at its lowest level since April 2025—a period when households were dealing with sharp increases in utility bills.
Retailers themselves have struck a cautious tone in recent trading updates. Several major names said they have not yet seen a direct hit to sales linked to the Iran war, including department store group John Lewis, home improvement retailer Kingfisher (owner of B&Q), and clothing chain Next.
Next, however, flagged a key concern for the months ahead: if war-related disruption persists beyond three months, it may need to pass through higher operating costs by increasing prices. That warning underlines a central risk for the sector—higher fuel and input costs could squeeze margins if consumers resist price rises, or could dampen demand if shoppers pull back as bills rise.
For now, UK retail sales February reflects a month shaped by weather and a post-January cooling, but the bigger issue for retailers is whether energy-driven inflation and fragile sentiment turn a single-month dip into a broader slowdown as spring trading begins.
