British consumers bought less stuff last month, as inflation ate into household budgets and wet weather drove shoppers from the high street, states latest data from Office for National Statistics (ONS).
Retail sales volumes across Great Britain dropped by 0.9 per cent in March. That follows a 1.1 per cent rise in February 2023, which had lifted hopes for economic growth this year.
On an annual basis, overall retail sales volumes fell by 3.1 per cent last month compared to March 2022. But, shoppers spent 4.5 per cent more to buy less, reflecting price increases over the last year.
The ONS reports that sales volumes at “non-food stores” fell by 1.3 per cent during March, following a rise of 2.4 per cent in February. Retailers blamed “poor weather conditions throughout most of March” for affecting sales.
Food store sales volumes fell by 0.7 per cent in March 2023, following a rise of 0.6 per cent in February 2023. Food prices have been rocketing higher, with food and drink inflation at a 45-year high over 19 per cent.
Many supermarkets imposed limits on fresh produce such as tomatoes, peppers and cucumbers because of poor weather in areas including southern Spain and North Africa.
The ONS said that “26 per cent of adults experienced shortages of essential food items that were needed on a regular basis” for much of March. That was an increase of the 18 per cent who reported similar problems in February.
The amount of food that people bought last month is 3 per cent below pre-pandemic levels in February 2020, which retailers blamed on the increased cost of living and higher prices.
Meanwhile, there are some signs that consumer confidence is improving, as shown by GfK which states that consumer confidence index has risen by six points to minus 30 in April. That follows a two-point increase in the previous month, and could be an early sign of an economic recovery.
Despite the sharp fall in March, retail sales for the first three months of the year grew by 0.6 per cent compared to the previous three months. Capital Economics said this suggests “the 18-month retail ‘recession’ may have come to an end. Indeed, the more seasonable weather in April may support a rebound in sales this month”.
However, Capital Economics added that sales could still be tempered by a further rise in the interest rate when the Bank of England next meets in May, putting further pressure on consumer spending.
Fed National President Mo Razzaq
Fed National President Mo Razzaq
