Retail sales decline in March as consumer confidence plummets – report

Retail sales growth slowed significantly last month as consumer confidence “continued to decline”, according to a new study.

The latest BRC-KPMG retail sales monitor found total sales rose 3.1% in March, following a 6.7% rise in February.

Experts added that the growth in total sales in March was boosted by rising prices across the sector.

It came as separate Barclaycard research showed that rising fuel prices and household bills were starting to affect customers’ spending habits.

The new data comes as the cost of living crisis and rising household inflation pose a new challenge for the retail sector after two years blighted by the pandemic.

BRC-KPMG data showed comparable retail sales were down 0.4% from the same month last year.

Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “As consumer confidence continued to decline, sales slowed in March and, although spending remained higher than last year, this reflects probably higher prices.

“The rising cost of living and the ongoing war in Ukraine have shaken consumer confidence, with expectations about people’s personal finances over the next 12 months reaching depths not seen since the 2008 financial crisis.

“Furthermore, households have yet to feel the full impact of recent energy price hikes and changes to national insurance.

“Ultimately, consumers are facing a huge challenge this year, and that will likely be reflected in retail spending going forward.”

Figures also showed online non-food sales fell 29% in the three months to March as the pandemic-fueled digital boom continued to recede.

However, Don Williams, retail partner at KPMG, said “online penetration rates remain high” as they were compared to a period of store closures a year earlier.

Meanwhile, total food sales fell 2.6% in the three months to March.

Susan Barratt, CEO of IGD, said: “Food and beverage sales struggled in March, in part due to the strong comparison to 2021.

“Not only did sales increase last year due to the lockdown, but Easter was also earlier and we have yet to see holiday spending increase this year.

“It’s no surprise that buyer confidence continues to fall and is now below the previous low of December 2013 when the horsemeat scandal hit the food industry.”

Elsewhere, the latest credit card data from Barclaycard showed consumer spending was still significantly above pre-pandemic levels as people spent more on hotels, but still highlighted some pressure on consumer confidence.

Card spending in March rose 17.7% from levels in the same month in 2019 as people spent more on essentials.

The increase was particularly due to an increase in fuel expenses, which soared 26.1% after the price spike.

Jose Carvalho, head of consumer products at Barclaycard, said: “Many sectors saw strong growth in March compared to the same period in 2019, as sunnier weather encouraged Britons to socialize in pubs and restaurants. bars, book stays and update their spring and summer wardrobes. .

“However, rising fuel prices and household bills are clearly starting to influence consumer behavior, with many Britons changing their travel and shopping habits to save money.

“While this may dampen growth in the coming months, we should not overlook the expected heat wave later in April and the fast approaching Easter holidays, both of which are likely to boost non-essential spending. .”

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