Retail sales in Great Britain fell more than expected in March as poor weather kept shoppers at home, ending two months of increased spending by consumers.
The Office for National Statistics (ONS) said retail sales volumes dropped by 0.9% last month as the wettest March in 40 years dampened shopper enthusiasm for visiting department stores, clothing shops and garden centres.
The decline, which followed increases of 1.1% and 0.9% in February and January respectively, was more than the 0.5% drop expected by economists.
Non-food stores sales fell by 1.3% year on year in March, after a strong 2.4% rise in February, as retailers lamented the impact of the weather on customer purchasing. The Met Office has said that last month was the sixth wettest March on record since 1836.
Sales volumes in department stores and clothing stores fell by 3.2% and 1.7% month on month, while sales dropped by 0.6% in jewellery stores and garden centres.
“Retail fell sharply in March as poor weather impacted on sales across almost all sectors,” said Darren Morgan, a director of economic statistics at the ONS. “In the latest month, department stores, clothing shops and garden centres experienced heavy declines as significant rainfall dampened enthusiasm for shopping.”
The ONS also recorded a 0.7% fall in sales at food stores, after a 0.6% increase in February, as consumers felt the pinch of soaring food prices.
Earlier this week the ONS reported that the price of food and non-alcoholic drinks accelerated by 19.1% in the year to March, fuelled by record growth in the price of bread and cereals and a sharp rise for biscuits and cakes, their fastest annual rate since 1977.
Inflation fell by less than expected in March to 10.1%, having peaked at 11.1% in October, remaining stubbornly high, with the UK the only country in western Europe where prices are still rising at a double-digit percentage rate.
This is reflected in the ONS retail figures, with the volume of sales down 3.1% in March compared with a year earlier, as the cost of living crisis causes consumers to slash household spending, while rounds of price rises on goods led to the value of sales rising by almost double that at 6% last month.
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However, the strong start to the year meant that sales across the first quarter as a whole showed their first quarterly rise since August 2021.
“With bad weather dampening consumer demand, retailers will be hopeful that April’s festivities – Easter and Ramadan – prompted more sales,” said Samantha Phillips, a partner at McKinsey & Company. “And that the coronation bank holiday in May will act as a reason for further celebration.”
There are some signs that consumer confidence is improving. The consumer confidence index issued by the market researcher GfK has risen by six points to -30 in April.
That follows a two-point increase in the previous month, and could be an early sign of an economic recovery.
“Pressure on real wages is set to ease over coming months and consumer confidence has risen from its lows,” said James Smith, a developed markets economist at ING. “That suggests the worst is behind us for the UK high street. Admittedly, none of this points to a rapid rebound in retail activity but is another piece of the jigsaw that suggests the UK economy will dodge a technical recession in the first half of the year.”
