Retail sales in the United Kingdom declined in February, signaling growing pressure on consumers ahead of potential economic impacts from rising oil prices linked to the Iran conflict.
According to the Office for National Statistics, retail sales volumes fell by 0.4% month-on-month, following a strong 2.0% increase in January—the highest growth since mid-2024. The decline was smaller than economists’ expectations but reflects weakening momentum.
On an annual basis, sales growth slowed to 2.5% from 4.8% in January. Reduced spending across fuel, clothing, food, and household goods—partly due to unusually wet weather—contributed to the drop.
Consumer sentiment has also weakened following the US-Israeli strikes on Iran, which have driven oil prices up by around 50%. Analysts warn that higher energy costs could further strain household budgets and dampen retail demand in the coming months.
Industry experts highlight growing uncertainty for retailers as they enter the spring season. Rising fuel and input costs are expected to impact both businesses and consumers.
While major retailers such as Next plc and Kingfisher plc have not yet reported a direct impact on sales, they remain cautious. Next has indicated that prolonged disruption could lead to price increases to offset rising costs.
The outlook for the UK retail sector remains uncertain, with inflationary pressures and geopolitical risks continuing to weigh on consumer spending.
