Retail sales in Great Britain fell by more than expected last month majorly due to the soaring prices of food and fuel amid growing fears over the cost of living.
Latest figures from the Office for National Statistics (ONS) showed retail sales volumes dropped by 1.4 percent in March, after a decline of 0.5 percent a month earlier as shoppers adjusted to rising costs. City economists had forecast a drop of 0.3 percent.
Spending on food fell for the fifth consecutive month as supermarkets reported a sharp drop in sales alongside declines for butchers and bakers, as well as an 11.3 percent fall in spending at alcohol and tobacco stores.
The ONS said some of the drop in spending could be explained by consumers returning to pubs and restaurants after the easing of pandemic restrictions, although it warned the impact of rising food prices on the cost of living was also hurting retail sales.
Against a backdrop of soaring global energy prices and rising cost of a weekly shop, inflation reached 7 percent in March – the highest level since 1992 – and is forecast to rise further this month after a record increase in household gas and electricity prices. The Bank of England has warned the measure for the rising cost of living could hit 10 percent later this year, the highest level since the early 1980s.
With prices for petrol and diesel hitting a record high last month as the Russia-Ukraine war ripples through global oil and gas markets, fuel sales across Great Britain fell 3.8 percent in March as households cut back on non-essential travel.
The ONS said online spending fell to 26 percent as a proportion of total sales – the lowest since February 2020, immediately before the Covid-19 pandemic spread – with consumers returning to shopping on the high street and as families cut back on non-essentials.
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