Retail sales in the UK saw a significant increase last month, mainly driven by higher food spending due to an early Easter, according to the British Retail Consortium. Despite this boost, overall sales growth remained subdued, impacted by dampened demand for other goods caused by wet weather. The UK economy, which experienced a shallow recession in the second half of last year, is showing signs of sluggish growth in the first quarter of this year, supported by easing inflation pressures.
The British Retail Consortium reported a 3.5% year-on-year increase in total retail spending in March, a notable rise from the 1.1% growth seen in February. This growth surpassed the pace of consumer price inflation for the first time in over two years. However, it is important to note that the figures are not seasonally adjusted, with the early Easter shift playing a significant role in the boost to food sales.
While food sales surged by 6.8% compared to the previous year in the first quarter, non-food spending witnessed a decline of 1.9%. The adverse impact of wet weather in March was evident in reduced sales of garden furniture, home improvement goods, clothing, and footwear.
Barclays’ data revealed that consumer spending growth, a broader metric than retail sales, remained at 1.9% in March, matching its lowest annual rate since September 2022. Despite factors like the release of “Dune 2” and events like St Patrick’s Day and rugby matches boosting spending, the overall growth rate remained subdued. Retail experts are hopeful for an uptick in demand in the upcoming months, driven by better weather, lower energy prices, higher wage growth, and anticipated events like Taylor Swift concerts and the Olympics.
