Poor weather sees retail sales fall 0.9% in March
The only marginal increase seen in the data was a 0.1% rise in the sale of household goods
Retail sales in the UK fell 0.9% in March according to latest figures from the Office for National Statistics (ONS).
Some of this fall can be attributed to the poor weather in March following a 1.1% rise in February.
Furthermore, non-food stores sales volumes fell by 1.3% in March 2023, following a rise of 2.4% in February.
Non-store retailing, predominantly online retailers, sales volumes fell by 0.8% in March 2023, after a rise of 0.3% in February 2023.
The only marginal increase seen in the data was a 0.1% rise in the sale of household goods.
Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, said: “It looks like the wet March weather played its part in dampening retail sales. Consumer confidence remains below par as people are still keeping a close eye on budgets and steering away from making non-essential purchases or going out.
“However, as the economic outlook and weather begins to improve, retailers’ optimism should rise as consumers look to buy DIY, garden and fashion products. With plenty of upcoming celebrations, including bank holidays, the King’s Coronation and Eurovision in Liverpool, mega-May is all to play for.”
Thomas Pugh, economist at RSM UK, added: “The 0.9% m/m drop in retail sales keeps the risk of a recession alive. GDP as a whole needs to fall by 0.5% m/m in March for Q1 to register a contraction.
“Given retail sales make up around a third of consumer spending, there is clearly a significant risk that GDP falls by that much, especially as the wet weather which dampened retail sales will also depress output in other sectors of the economy such as construction.”
He added: “However, there are reasons to be a bit more optimistic looking forward. The impact of the wet weather will fade in April. What’s more, consumer confidence took a sharp upswing in April – pointing to higher spending, although it is still well below normal levels. Households’ finances should also start to pick up soon as inflation falls sharply but the tight labour market keeps wages high.”
