UK retail has recorded its biggest monthly fall for at least 16 years, the British Retail Consortium (BRC) has said, writes Michelle Perrett.
Retail sales values were down -1.9% on a total basis from March 2010 while on a like-for-like basis, sales were 3.5% lower, against a 4.4% increase in March 2010.
This is despite the fact that sales values had risen by 6.6% in March 2010, boosted by Good Friday and Easter Saturday falling in the March trading period.
Like-for-like food sales fell well below their year-earlier level and non-food sales showed an even larger decline.
Consumers’ underlying uncertainty about jobs and incomes, as well as the later Easter, hit both.
Stephen Robertson, director general, British Retail Consortium, said: “This is the worst drop in total sales since we first collected these figures in 1995.
“This is strong evidence of the pressure customers and traders are under. This year’s later Easter is a factor but this fall goes way beyond anything that can be explained by that alone.
“Uncomfortably high inflation and low wage growth have produced the first year-on-year fall in disposable incomes for thirty years. Mounting fuel and utility costs, falling house prices, higher VAT and the prospect of more tax rises and job losses left people unwilling to spend unless they really had to.
"These pressures aren’t going away and the arrival of higher National Insurance is likely to compound them in the immediate future.”
Helen Dickinson, head of retail at KPMG, said: “The food sector suffered in the month due to Easter purchasing falling into March last year, thus impacting the overall results. We have seen an emergence of new, lower spending patterns since the middle of January, which are currently continuing to trend downwards.
"Many retailers will not be able to sustain this ongoing weakness in demand beyond the short term and are hoping for some good news around the extended bank holiday period and a feel-good factor driven by the royal wedding. However, as disposable income continues to fall, without reducing saving or increasing borrowing – which would oppose current trends – this will not be possible.”
