UK retail sales fall in March, missing forecasts
By Abigail Townsend
Date: Friday 21 Apr 2023
(Sharecast News) - Retail sales fell by more than expected in March, official data showed on Friday, after the wet weather kept shoppers at home.
According to the Office for National Statistics, retail sales volumes fell by 0.9% in March, following a downwardly-revised increase of 1.1% in February. Most analysts had been looking for a 0.5% decline.
Within that, food store sales volumes eased 0.7%, reversing February's 0.6% increase, while non-food stores sales were down 1.3%, compared to a 2.4% rise a month previously.
Retailers reported that poor weather conditions throughout much of the month - the sixth wettest March on record since 1836 - affected sales. Department stores and clothing shops were especially affected, with sales volumes off 3.2% and 1.7% respectively over the month.
Year-on-year, retail sales volumes were down 3.1% on March 2022 and 0.7% below February 2020, pre-pandemic.
In the three months to March, sales volumes rose by 0.6% compared to the previous quarter, the first rise in this series since August 2021.
Danni Hewson, head of financial analysis at AJ Bell, said: "No one wants to hit the high street during a downpour.
"But the British weather can't take all the blame for falling retail sales. Inflation-weary shoppers have got used to cutting back or cutting out entirely and with prices of essential items like bread and cereal shooting up, some budgets are buckling under the weight.
"Over three months things look brighter, thanks to strong sales in January and February. The latest consumer confidence figures suggest people are feeling better about their personal prospects and are now ready to make big ticket purchase if the price and timing is right."
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: "The renewed decline in retail sales in March proves the recovery in January and February was a false dawn and suggests that consumers still are grappling with very high inflation and mortgage rates. The monthly decline in March left retail sales 1.6% below their 2019 average level.
"We expect retail sales to recover only gradually over the coming months. All told, we think that retail sales volumes will be only about 1% higher at the end of this year than a year ago, and will take until 2024 to return to their pre-Covid level."
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