Retail sales in the UK picked up in March after falling to a two-year low in February, with the early Easter and easing price pressures boosting consumer spending.
Data from the BRC/KPMG Retail Sales Monitor (RSM) shows total sales increased by 3.5% last month, well ahead of the 1.1% growth recorded in the previous period. March’s reading was also above the 12-month average of 2.9%.
The improvement was driven by a surge in food sales around the Easter weekend. They increased 6.8% in March on the back of stronger volumes as the price inflation continued to moderate.
Sarah Bradbury, Chief Executive of IGD, noted that grocers “benefited from Easter falling in March this year”, adding: “This marks the fourth consecutive month of year-on-year volume growth, offering hope to retailers and suppliers of finally being able to regrow margins that have shrunk during the cost of living crisis.”
Meanwhile, non-food sales fell by 1.9% as increased spending related to Easter was offset by wet weather dampening demand for garden furniture, BBQs, DIY products, and clothing.
The figures add to recent evidence that cost of living pressures are easing as inflation subsides, with some economists forecasting a sustained rebound in consumer spending.
Helen Dickinson, Chief Executive of the BRC, said: “After a difficult start to the year, retailers are hopeful that with warmer weather around the corner, consumer confidence will spring back up.”
Linda Ellett, UK Head of Consumer Markets, Leisure & Retail at KPMG, added: “As April signals big increases in the sector’s cost base – through the rise in minimum wage rates and business rate hikes for the larger high street brands – retailers will be hoping that the bounce back of March sales is more than just an Easter blip. Economic indicators are heading in the right direction, with inflationary pressures easing and interest rates having potentially peaked.
“However, consumer confidence remains fragile, and households continue to keep a close eye on where their tight budgets are being spent. It remains a challenging environment, but as we head into the warmer months, retailers will be hoping that stronger consumer confidence will turn into stronger retail sales, especially in more discretionary categories such as clothing, following an incredibly difficult few years.”
