High Street

Retail sales slow as consumer confidence wanes

According to the latest BRC-KPMG sales monitor Total sales increased by 3.1% in March, dropping below the 3-month average growth of 6.9% and the 12-month average growth of 10.3%

Total sales increased by 3.1% in March, dropping below the three-month average growth of 6.9% and the 12-month average growth of 10.3% as customer confidence waned amidst the cost of living crisis, according to the latest BRC-KPMG sales monitor.

UK retail sales decreased 0.4% on a like-for-like basis from March 2021, when they had increased 20.3%.

Over the three months to March, food sales decreased 2.6% on a total basis and decreased 3.1% on a like-for-like basis. This is below than the 12-month total average growth of 0.8%. For the single month of March, food was in decline year-on-year.

Meanwhile, over the three-months to March, non-food retail sales increased by 14.9% on a total basis and by 8.6% on a like-for-like basis. This is worse than the 12-month total average growth of 18.3%. For the single month of March, non-food was in growth year-on-year.

Helen Dickinson, chief executive of the British Retail Consortium, said: “As consumer confidence continued to sink, March saw sales slow, and while spending remained above last year this likely reflects higher prices.

“While it is promising to see experiential shopping back in fashion, much in-store retail has not recovered to its pre-pandemic level. Online sales also decreased compared to last year but remain well above 2019 levels due to investment by retailers in their digital offer.”

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

“Furthermore, households are yet to feel the full impact of the recent rise in energy prices and national insurance changes. There is also potential for further supply chain disruption, with China putting key manufacturing and port cities into lockdown. Ultimately, consumers face an enormous challenge this year, and this is likely to be reflected in retail spend in the future.”

Don Williams, retail partner at KPMG, added: “Sales growth in March rose at the slowest rate so far this year, suggesting clouds on the horizon as household budgets come under pressure from rising costs, an increasing tax burden and competition from holidays. There is concern on what this could mean for consumer confidence and the impact on discretionary spend.”

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