Retailers reported that sales were good for the time of year at 6 per cent from -3 per cent in January. Sales volumes are expected to exceed seasonal norms to a slightly greater extent next month at 11 per cent, according to the CBI Distributive Trades Survey.

Price growth in the year to February remained near multi-decade highs, that is at 80 per cent from 82 per cent in November. Next month, prices are expected to continue to increase at this rapid pace by 80 per cent.

In the year to February, retail employment declined for the second quarter in a row by 12 per cent from -17 per cent in November. Retailers are expecting headcount to continue to contract next month by 16 per cent. Moreover, retailers’ investment intentions have improved since November but remain negative overall, that is at -16 per cent from -38 per cent.

Martin Sartorius, CBI principal economist, said: “Whilst retail sales volumes were largely unchanged in the year to February and slightly above seasonal norms, firms remain pessimistic about their business outlook and are bracing themselves for yet another fall in sales next month.

“At the upcoming Spring Budget, the government must take action to tackle the roadblocks in the way of the UK’s economic growth. Retailers are now looking for action in areas like skills and investment. Transforming the Apprenticeship Levy into a Skills Challenge Fund and incentivising businesses investment through introducing a successor to the super deduction will be crucial for improving our economic prospects.”

In addition, the data showed that the pace of decline in online retail sales accelerated in the year to February, that is by -30 per cent from -4 per cent in January. Next month, the contraction in online sales is expected to ease by 24 per cent.

In the year to February, retailers reported that orders placed upon suppliers declined—but at a slower pace than last month—by -25 per cent from -32 per cent in January. Orders are expected to fall at a broadly similar pace next month by 23 per cent.

The study involved 136 companies including 59 retailers.

Fibre2Fashion News Desk (NB)