Retail Sales Fall At Fastest Rate In Seven Years

Official figures from the Office for National Statistics (ONS) show that UK retail sales fell by 1.4% during the first quarter of 2017 as shoppers reined in their spending due to rising prices.

The quarterly fall was the biggest in seven years, compounded by 1.8% fall in March compared with the previous month.

The ONS said demand had fallen for all types of goods, particularly household products and petrol. However, sales of textiles, clothing and footwear were more resilient.

Kate Davies, ONS Senior Statistician, said: “Today’s retail sales figures show a decline on the month and on the three months to March, which coincides with quarter 1 in 2017. This is the first time we’ve seen a quarterly decline since 2013, and it seems to be a consequence of price increases across a whole range of sectors.”

Richard Lim, Chief Executive at Retail Economics, commented: “This latest data shows that the surge in inflation is putting retailers under intense pressure with the first quarterly decline in retail sales since 2013. Families are facing the fastest rise in living costs for over three years and they are reining in their spending rapidly.

“We’re concerned for the outlook for the retail industry given the toxic mix of rising operating and sourcing costs against a backdrop of weaker consumer demand and heightened political and economic uncertainty.

“Indeed, recent research conducted by Retail Economics found 43% of consumers suggested they had adopted more cautious spending habits over the last three months citing Brexit and personal finances as their main concerns.

“Furthermore, we forecast that real earnings are likely to start to shrink by mid-2017 which will put further pressure on the retail industry.”