Retail Sales Dropped Sharply In March

The ONS has published retail sales data for March, revealing that sales dropped by 1.4% - considerably more than had been expected.

Main points from the data:

• Retail sales volumes fell by 1.4% in March 2022 following a fall of 0.5% (revised from a fall of 0.3%) in February 2022; sales volumes were 2.2% above their pre-coronavirus (COVID-19) February 2020 levels.

• The largest contribution to the fall came from non-store retailing in which sales volumes fell by 7.9% over the month following a fall of 6.9% in February; despite these drops, sales volumes were 20.3% above their pre-coronavirus February 2020 levels.

• Food store sales volumes fell by 1.1% in March 2022 and have fallen each month since November 2021; higher spending in pubs and restaurants linked to reduced coronavirus restrictions, as well as the impact of rising food prices on the cost of living are possible factors for reduced spending in food stores.

• Automotive fuel sales volumes fell by 3.8% in March 2022 with other data sources indicating that some non-essential road travel had been reduced following record high petrol and diesel prices.

• Non-food store sales volumes rose by 1.3% in March 2022 because of growth in other non-food stores (2.9%), and household goods stores (2.6%) such as DIY stores.

• The proportion of retail sales online fell to 26.0% in March 2022, its lowest proportion since February 2020 (22.7%), continuing a broad downward trend since its peak in February 2021 (37.1%).

BRC Commentary

Responding to the latest ONS Retail Sales Index figures, which showed 4.9% year-on-year sales growth in March 2022 (value, non-seasonally adjusted retail sales excluding fuel: J3L2), 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.

“Retailers are themselves squeezed between rising costs of operations, exacerbated by the situation in Ukraine, and weaker demand from customers. Higher global commodity prices, rising energy and transport costs, and a tight labour market, are all taking their toll. As a result, it is likely that retail prices will continue rise over the course of 2022.”

Source : ONS, BRC

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