Report: Retail sales fell in March as consumer confidence waned


The cost of living crisis poses a new challenge to the retail sector

According to a new study, retail sales growth slowed significantly last month as “consumer confidence continued to decline.” The latest retail sales monitor BRC-KPMG showed that total sales rose 3.1% in March, lagging the 6.7% growth in February.

Experts added that the increase in total sales in March was due to higher prices in the sector. It came after a separate Barclaycard study showed that rising fuel prices and household taxes were starting to affect consumer spending patterns.

The new data comes as the life crisis and rising household inflation pose a new challenge to the retail sector after two years of damage from the pandemic. BRC-KPMG data showed that comparable retail sales fell 0.4% from the same month last year.

Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “After a continued decline in consumer confidence, sales slowed in March, and although costs were higher than last year, this likely reflects higher prices. The rising cost of living and the ongoing war In Ukraine, to shake consumer confidence, he predicted that people’s personal finances would reach depths not seen since the 2008 financial crisis in the next 12 months.

Moreover, households are still not feeling the full impact of the recent rise in energy prices and changes in the National Insurance. “Ultimately, consumers are facing a huge challenge this year and this is likely to affect retail costs in the future.”

The data also showed that online non-food sales fell 29% in the three months to March as the digital boom caused by the pandemic continued to decline. However, Don Williams, KPMG’s retail partner, said “internet penetration is still high” compared to the year before the stores closed.

Meanwhile, total food sales fell 2.6% in the three months to March. Susan Barratt, CEO of IGD, said: “Food and beverage sales fell in March, in part because they were stronger than they were in 2021.

“Not only did sales increase last year due to the shutdown, but Easter was even earlier and this year we still haven’t seen an increase in holiday spending yet. Not surprisingly, consumer confidence is still waning and is now below the previous low in December. 2013, when the horse meat scandal hit the food industry.

Elsewhere, Barclaycard’s latest credit card data showed consumer spending was still well above pre-pandemic levels as people spent more on hospitality, but they still highlighted some pressure on consumer confidence. Card spending in March was up 17.7% compared to the same month in 2019 as people spent more on essentials.

The increase was particularly driven by fuel consumption, which rose 26.1% following the price increase. Jose Carvalho, Head of Consumer Products at Barclaycard, said: “Many sectors saw strong growth in March compared to the same period in 2019, as sunny weather prompted Brits to socialize in pubs and bars, book and update . . .

However, it is clear that rising fuel prices and household taxes are starting to affect consumer behaviour, with many Britons changing their travel and shopping habits to save money. While this may stymie growth in the coming months, we shouldn’t miss heat forecasts for late April and fast approaching Easter, both of which are likely to drive up unwanted costs.

Source: Belfastlive


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