The British Retail Consortium has warned that if the government increases business rates in next month's budget it will lead to "inexorable pressure" on retailers.
The BRC made the warning as it reported a rise in sales in February by 2.7% like-for-like. Total sales were also up by 4.4% in February compared to a 2.3% rise in the same month last year. Like-for-like sales were up 2.7% compared to a 0.3% decline last year. At the same time, online sales grew by 10.9%, higher than the same month in 2012 where they were up by 9.9%.
BRC general director Helen Dickinson said it was "reassuring" sales had built up and not faded from January. She said: "There are certainly highly welcome signs here of gradual improvement and customers feeling a bit more positive. February saw growth across all parts of retailing, with big-ticket goods and items for the home recovering particularly well, possibly reflecting better conditions in the housing market."
However, Dickinson also warned Chancellor George Osbourne to use next month's budget to act to secure "real and lasting" survival on the high street for retailers to ensure last month's figures are not simply a blip. "Consumers need a Budget that leaves them with more money in their pockets and the confidence to spend it and retailers with the means to invest," she said. "I hope the Chancellor seizes the moment."
David McCorquodale, head of retail, KPMG, echoed Dickinson's calls for this year's budget to put retail first and freeze business rates. The government currently plans to increase business rates by 2.6%.
McCorquodale said: "The forthcoming Budget will be a pivotal moment for the retail sector. If the proposed rise in business rates goes ahead then retailers will be placed under inexorable pressure. However, if the Chancellor chooses to freeze rates, then he could give the sector some much needed breathing space to tackle the significant pressures it is facing."
He added that February's rise in sales would boost retailers' confidence levels.