UK retail sales stagnate in February, before virus hit

LONDON (Reuters) - British retail sales stagnated last month in their weakest performance in nearly seven years, official data showed on Thursday, even before what shops expect to be the biggest fall in sales for over a decade due to coronavirus-imposed shutdowns.

Sales volumes were flat in February compared with the same month in 2019 after growth of 0.9% in January, the Office for National Statistics said.

This was the first time sales have not grown since March 2013, when Britain was hit by the heaviest snowfall in 30 years, and below economists' forecasts in a Reuters poll for annual growth to hold broadly steady at 0.8%.

The outlook for retailers appears bleak, especially outside the food sector which has seen a temporary surge in demand as Britons stockpiled supplies in case they are trapped at home by illness or growing restrictions on movement.

On Monday the government ordered all non-essential stores to close to the public, though supermarkets remain open and some online retail is continuing for now.

"People should brace for a eye-watering fall in retail sales in the region of 30% month-on-month in April," said Thomas Pugh, economist at consultancy Capital Economics.

"Retail sales may be flat in March as exceptionally strong food sales offset weakness elsewhere," he added.

The Confederation of British Industry reported on Wednesday that retailers expected the biggest fall in sales since April 2009 next month, according to a survey the CBI conducted before the latest shutdowns.

The ONS said that in February alone, sales dropped by 0.3% after a 1.1% jump in January, due to unusually bad weather and flooding in parts of Britain.

"A small number of retailers also said that the impact of the coronavirus had affected sales of goods shipped from China," she added," ONS statistician Rhian Murphy said.

(Reporting by David Milliken; Editing by William Schomberg)