Consumer confidence edges up in February, but wet weather clouds retail outlook

Consumer confidence has improved for a third straight month, according to a survey by the British Retail Consortium (BRC). Yet sluggish retail sales, due partly to consistently wet weather, dampen retailers' outlook, shares the Confederation of British Industry (CBI).

BRC data showed that consumer confidence in the state of the economy improved by two points, rising from -32 in January to -30 in February, the highest level since June 2025. Young people remain the most upbeat, with men notably more confident than women about the next three months, commented Helen Dickinson, Chief Executive of the British Retail Consortium.

Personal spending on retail rose to 0 from -6 in January, while consumers' personal spending overall rose to +6, up by one point compared to January.

"Spending expectations edged up in February, but retail demand remains weak by historical standards, leaving retailers under continued pressure," said Dickinson.

Consumers' personal financial situation has improved slightly from -8 in January to -6 in February, although personal savings Dickinson commented that overall, "this lift in confidence is encouraging, but fragile. Slow growth and rising unemployment still weigh heavily on the economy".

This is reflected in the bleak outlook reported by retailers in the CBI's monthly distributive trades survey.

The survey showed a rapid fall in retail sales volumes in the year to February (-43% compared to -17% in January), which some retailers attributed to wet weather discouraging shoppers from visiting stores. However, the rate of decline is expected to decelerate again next month, back to January rates (-17%).

Sales for the time of year were also judged to be “poor” in February, comparable to January (-16% from -15% in January). Next month’s sales are expected to still fall short of seasonal norms, but to a lesser degree (-9%).

While online retail sales volumes recovered in the year to February, growing from -41% in January to +43% in February, they were not enough to lift the overall index.

"Soft demand conditions and elevated costs have continued to feed through to gloomy sentiment in the retail and broader distribution sector, prompting many firms to scale back investment plans and headcount," said Martin Sartorius, Lead Economist at the CBI.

Both Sartorius at the CBI and Dickinson for the BRC called for government action to help improve retail conditions.

"Potential future rate cuts and rising real wages could help unlock discretionary spending, but only if Government acts too - tackling economic headwinds and mitigating business costs to help ease the cost of living. Only by boosting consumer spending can retail begin to unlock more jobs and investment in local economies across the country," said Dickinson.

"The Spring Forecast represents an important milestone for the government to build momentum behind its growth mission. Firms will be looking for the Chancellor to set out how the government plans to mitigate the impact of rising employment costs in the distribution sector, particularly given its vital role in providing first jobs for young people," added Sartorius.