Retail Sales Monitor
Retail Sales Monitor: Sales Beat Expectations Despite Falling Volumes
Helen Dickinson OBE, Chief Executive, BRC:
While the wettest March in over forty years dampened sales growth for fashion, gardening and DIY products, Mother’s Day brightened up sales for the month. Stores were given an extra boost, as last-minute shoppers dashed to their local high streets and shopping centres to purchase jewellery, fragrances and flowers.
With consumer confidence edging up and big events on the horizon such as the King’s Coronation, retailers have reason for a spring in their step. However, extensive cost pressures on business remain, and Government must ensure it minimises incoming regulatory burdens. Unless these future costs are brought to a heel, we will likely see high inflation continue for UK consumers who already face rising household bills from this month.
Paul Martin, UK Head of Retail, KPMG:
Many retailers hoping for a Mother’s Day boost will have been disappointed with overall sales growth of just 5% in March, against a backdrop of rising inflation running at more than 10%.
High street retailers saw some limited growth across most categories in March, but as consumers cut back on eating out, spending on home comforts, accessories and furniture saw the biggest growth with people looking to entertain at home instead. Online retailers also benefited from the boost in sales of home items, but saw continued decline in sales across most other categories, particularly clothing.
As we enter April, rising utility costs, council tax and mobile bills coupled with frozen personal tax rates and the withdrawal of energy bill support will see consumers having to further cut back on discretionary spending. Consumers will continue to take steps to reduce spend where they can - switching where they shop, what they buy, and spending on fewer items.
The challenge for retailers right now is having to face into their own rising cost agenda, as the rise in minimum wage rates comes into effect and inflation continues to challenge margins, whilst ensuring affordability, choice and value for customers, which will be key to keeping the tills ringing.
As the difficult economic conditions continue, retailers will be hoping that April prompts consumers to look for some comfort in Easter treats and the sun starts to shine forcing replenishment of summer wardrobes.
Food & Drink sector performance, Susan Barratt, CEO, IGD:
UK food and drink sales in March followed a similar pattern as previous months, with volume sales continuing to be negative and value sales positive. As such, inflation continues to loom heavily over shoppers. Retailers are striving to deliver value with loyalty schemes, quality private label products and meal solutions that enable consumers to recreate restaurant experiences at home.
Customer sentiment is stabilising, with our Shopper Confidence Index remaining flat in March. Coupled with our prediction that food price inflation will decline from 18% to 8% by the end of the year, shoppers are becoming less fearful. Fewer now expect food prices to get much more expensive in the year ahead (33% compared to 53% in August ’22) and fewer plan to cut back their spend across a range of activities including on food and groceries and eating out.
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