UK retail sales growth slowed last month as fears over the rising cost of living led to the biggest drop in consumer confidence since the 2008 financial crisis, according to industry data.
The British Retail Consortium said total sales rose 3.1% in March from the same month a year earlier, down significantly from the 6.7% increase in February and the rate of growth average over 12 months of 10.3%.
Comparing March to the same month in 2019 before the Covid pandemic spread, total sales rose 5.4% as retailers warned that rising inflation was starting to hurt consumer spending.
Helen Dickinson, chief executive of the BRC, said it was likely the strength in total retail value sales reflected surging prices rather than a rush of consumers to stores after pandemic restrictions eased.
“The rising cost of living and the ongoing war in Ukraine have shaken consumer confidence, with expectations about people’s personal finances over the next 12 months reaching depths not seen since the 2008 financial crisis,” he said. she declared.
“Ultimately, consumers are facing a huge challenge this year, and that will likely be reflected in retail spending going forward.”
The latest snapshot compiled by the retail industry showed increased spending on beauty and fashion items ahead of Mother’s Day – March 27 – as people gradually returned to cities and centers -cities led to an increase in the demand for clothing.
However, food spending fell 6.1%, possibly due to a later Easter from a year earlier, and consumers starting to eat in restaurants and pubs again after the Omicron variant weighed on demand.
Susan Barratt, chief executive of research body IGD, said the prospect of soaring prices had taken consumer confidence below levels last seen in December 2013 when the horsemeat scandal broke. shook the food industry.
“These challenges affect shoppers in different ways, with household cutbacks seeing less affluent shoppers skipping meals to save money,” she said.
“This volatile period is likely to continue as the reality of rising energy prices, as well as general inflation, hits buyers.”
Separate figures from Barclaycard showed consumer card spending rose 17.7% in March, largely driven by higher fuel and food prices as households came under increasing pressure from the Cost of life.
Barclaycard, the UK’s biggest credit card provider, processing nearly half of all card transactions, said shoppers were buying in bulk to save money, with many stocking up on non-perishable items and household supplies.
As gasoline and diesel prices hit record highs after Russia’s invasion of Ukraine sent global energy markets soaring, he said spending on fuel rose by 26.1%.
In response to the high prices, surveys on behalf of the map provider showed that 41% of people were changing the way they traveled, including walking and cycling more, and cutting back on longer car journeys.
Jose Carvalho, Head of Consumer Products at Barclaycard, said: “Rising fuel prices and household bills are clearly starting to influence consumer behavior, with many Britons changing their travel and shopping habits to save money. the money.
“While this may dampen growth in the coming months, we should not overlook the expected heatwave later in April and the Easter holiday, both of which are likely to boost non-essential spending.”