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UK retail sales flat in March

Apr 23, 2024 United Kingdom

The first quarter was a disappointing one for retailers. The latest figures from the Office for National Statistics (ONS) show that both the value and volume of sales in March were unchanged on the previous month

The ONS said retail sales remained broadly flat for a second month, with volumes rising by 0.8% in the year to March 2024, while remaining 1.2% below their pre-pandemic level in February 2020. Quarterly, sales volumes rose by 1.9% in the three months to March 2024 as compared with the previous three months, following “low sales volumes over the Christmas period for retailers”.

While fuel and non-food sales volumes (the total of the department, clothing, household and other non-food stores) rose by 3.2% and 0.5%, respectively over the month, this was offset by falls of 0.7% and 1.5% in food and non-store sales, respectively. In particular, sales of textile clothing and footwear rose by 0.5% in retail stores and by 3.4% in online stores.

Nicholas Hyett, investment manager at Wealth Club, said that “retailers had a gloomier March than many expected, and overall sales remain 1.2% below their pre-COVID peak”. “Department stores remain an area of particular weakness”, he added.

“Given the uncertain economic picture, consumers remain cautious with their spending”, Matt Jeffers, retail strategy and consulting managing director for Accenture in the UK & Ireland, said. However, “as we approach the summer, and after two relatively flat months, retailers need to boost their efforts to attract and retain customers. Since price is a primary concern for shoppers, brands must highlight the value and quality of their products to stand out in the competitive market”.

EY UK&I retail lead, Silvia Rindone, points out that “as food inflation starts to ease, the price gap between private label and branded products will narrow”, so some consumers may return to branded products, which often offer more innovative ranges, having shown a preference for private label goods during the recent cost of living crises.

On the one hand, private label products must continue to offer clear price advantages to maintain their appeal, Rindone says, but retailers must ensure that they are transitioning to growth rather than continuing to focus on price, and that there is a theme of continuous improvement rather than one-off transformation.

Image Credits: smallbusiness.co.uk

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