Official sales figures give little comfort as inflation piles on pressure

Annette K. Brown

Overall retail sales were down 1.4% on the same month last year, with February’s figures also revised down.

Food sales fell for the fifth consecutive month, although the ONS said overall sales were still above pre-Covid levels.

Helen Dickinson, chief executive of the British Retail Consortium, said: “March sales were impacted by rising concerns around inflation as consumer confidence tumbled.

“The cost-of-living squeeze has many consumers thinking twice about major purchases, while their expectations of future financial situation plummeted to lows not seen since the financial crisis.

“Consumers face even more challenges as the energy price cap rose to a record high this month.

“Internet sales dropped to their lowest proportion of total retail sales since the start of the pandemic as shoppers gradually returned to physical retail destinations.”

Dickinson added that the BRC expected retail inflation to continue to rise through 2022.

Most analysts expect inflation to continue to pile pressure on retail.

Silvia Rindone, EY UK’s retail lead, said: “EY’s latest Future Consumer Index found that two-thirds of UK consumers are worried about their finances, and many will be looking to make smart choices about their spending, focusing on retailers that offer the best value for money.

“Retailers will need to ensure they address these concerns and be very clear about the value for money proposition they offer to consumers – trying to be all things to all people is a risk.”

Rindone added that freight costs and stock delays are also likely to continue to pose challenges.

Oliver Vernon-Harcourt, head of retail at Deloitte, said: “The next few months will see further disruptions to supply chains and cost pressures.

“Consumers will also feel the pinch, particularly around discretionary spending, with April seeing the introduction of energy price-cap rises and national insurance increases.

“The retail industry will need to balance increasing costs with maintaining customer engagement.

“It will be key to make sure the right products and services are available, and at a price-point that meets consumers’ thriftier spending habits.”

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