Tough trading conditions see March retail sales shrink
The month-on-month growth rate fell by 1.2%, largely due to a 7.4% fall from petrol sales as the Beast from the East gripped the nation.
On a quarterly basis, the quantity bought also fell 0.5%, compared to the three months to November 2017.
The ONS reported there were declines in all sectors except for department stores (up 0.8%) and non-store retailing.
It is believed that gifts for Mother’s Day and Easter helped boost internet sales more than usual during the snow falls.
However, while supermarket sales fell in March, specialist food stores saw strong growth.
Overall, online sales accounted for 17.4% of all retailing, seasonally adjusted in March 2018, compared with 15.9% in March 2017.
Ben Brettell, senior economist at Hargreaves Lansdown, said UK retailers have faced tough trading conditions this year with Carpetright, Moss Bros and New Look particularly feeling the strain. Just this morning, Debenhams’ shares hit a nine-year low as it revealed an 85% drop in pre-tax profits.
He said: “The situation in March was exacerbated by the Beast from the East, which brought economic disruption, along with joy to children’s faces. That said, a couple of high-profile retailers have bucked the trend in recent days, with both Primark and JD Sports reporting improved figures.
“The weather meant a disappointing retail sales reading for March was all but guaranteed, but the figures were even worse than anticipated, with sales falling 1.2% as against an expected drop of 0.5%. This dragged down year-on-year growth to just 1.1% (2% forecast).”
Brettell added that the UK consumer has been “surprisingly resilient over the past few years”, even in the face of economic uncertainty, and there looks to be some light at the end of the tunnel for those suffering a squeeze in household budgets.
“Inflation fell to 2.5% in March, while the most recent wage growth figures show an acceleration to 2.8%. If this marks a sustained period of rising real wages, it could bode well for the retail sector – provided any pay rises aren’t swallowed up by increased mortgage payments as a result of May’s likely interest rate rise,” he said.