Total UK retail sales were up by 3.5% on last March, above the three-month average of 2.1% and the 12-month average of 2.9%, according to new figures
Retail sales in March saw a noticeable improvement, largely driven by an early Easter, providing firms with a much-needed boost after a challenging start to the year, according to recent data.
The British Retail Consortium (BRC) and KPMG’s Retail Sales Monitor indicates that total UK retail sales were up by 3.5% compared to last March, exceeding the three-month average of 2.1% and the 12-month average of 2.9%. There was a significant increase in food sales, up by 6.8% from the previous year, helped by an unusually early Easter and the subsequent uplift ahead of the long weekend.
Items such as cookware and tableware also experienced a surge in sales as people prepared to entertain family and friends during Easter. Home textiles like throws and pillows were high demand items as consumers upgraded their homes for spring.
However, not all sectors enjoyed a positive month; wet weather led to decreased sales of garden furniture, barbecues, DIY products, along with clothing and footwear. Despite strong performances in home accessories, health, beauty, and homewares, online sales continued to decline, down by 1.4%.
Hoping for an upward trend in customer spending, BRC Chief Executive Helen Dickinson commented: “After a difficult start to the year, retailers are hopeful that with warmer weather around the corner, consumer confidence will spring back up.”
Highlighting the potential contribution of a robust retail sector, she added, “A strong retail industry can boost investment across our towns and cities, and as we gear up for a general election, it is essential the next government recognises this and rethinks the burdensome costs imposed on retailers.”
Linda Ellett, UK head of leisure and retail consumer markets at KPMG, remarked: “An early Easter showed green shoots of spring for retailers in March, with sales growth up a more positive 3.5% on last year, and above headline inflation for the first time in more than two years.”
“As April signals big increases in the sector’s cost base through the rise in minimum wage rates and business rate hikes for the larger high street brands retailers will be hoping that the bounce back of March sales is more than just an Easter blip. Economic indicators are heading in the right direction with inflationary pressures easing and interest rates having potentially peaked, however consumer confidence remains fragile, and households continue to keep a close eye on where their tight budgets are being spent.”
Meanwhile, data from Barclays indicates that consumer card spending growth stalled in March, matching February’s 1.9% increase, largely due to a drop in non-essential spending as inclement weather affected both retail and restaurant sales. Retail spending was nearly stagnant, showing a slight 0.7% increase, while restaurants faced another tough month, with a 12.6% decrease, almost mirroring February’s 13.4% fall.
This comes alongside findings from Barclays that 45% of consumers are still tightening their belts when it comes to discretionary spending, with 53% of this group cutting down on clothing and accessories purchases and 47% reducing their dining out expenses.
Karen Johnson, head of retail at Barclays, commented: “Retailers were braced for a more subdued start to 2024, and recent figures are in line with expectations. The wet weather has been a key factor in the slowdown in discretionary spending, as it’s meant fewer visits to the high street and to hospitality venues.”
“However, in spite of this initial lull, many retailers are confident that spending will rebound in the coming months, particularly in anticipation of better weather, the energy price cap drop, an uplift in the National Minimum Wage, and the buzz around major events such as Taylor Swift’s Eras Tour and the Paris 2024 Olympics.”
The survey by Opinium, which took the pulse of 2,000 UK adults from March 22-26, reflects these sentiments.
