Wet weather blamed for retail sales dip as consumer confidence hits 14-month high
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A dip in retail sales last month could be mainly explained by a hit from poor weather according to experts, as the cost of living crisis continues to cast a big cloud over the economy.
The Office for National Statistics (ONS) said retail sales volumes fell by 0.9% in March – the first month on month decline of the year to date and worse than the 0.5% decline forecast by economists.
It reported that feedback from retailers pointed to the weather as being the main factor behind a 1.3% drop in non-food sales compared to the previous month,
The performance also reflected the continuing impact of inflation on shoppers’ budgets, with separate ONS data released earlier this week highlighting the highest food inflation since 1977.
Food volumes, the ONS data showed, eased by 0.7%.
It added that output in the retail sales sector was 0.6% up in the first quarter of the year, when compared with the previous three months.
ONS director of economic statistics, Darren Morgan, said: “Retail fell sharply in March as poor weather impacted on sales across almost all sectors.
“However, the broader trend is less subdued, as a strong performance from retailers in January and February means the three-month picture shows positive growth for the first time since August 2021.
“In the latest month, department stores, clothing shops and garden centres experienced heavy declines as significant rainfall dampened enthusiasm for shopping.
“Food store sales also slipped, with retailer feedback suggesting the increased cost of living and climbing food prices are continuing to affect consumer spending.”
The figures are important as consumer spending is the largest component of the UK economy – currently flatlining though seen by the Bank of England as swerving recession without further shocks.
It is widely tipped to introduce a 12th consecutive rise in Bank rate next month to maintain its battle against stubborn inflation, adding to borrowers’ costs further.
But there is evidence that the outlook for consumer spending is brightening, despite the tough economy.
A closely-watched survey of consumer confidence showed people were their most upbeat since February last year, when Russia invaded Ukraine, this month.
GfK’s Consumer Confidence Index rose for the third month in a row but still remained in negative territory at -30.
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Respondents were said to have a more positive view of their finances and the health of the wider economy.
Joe Staton, GfK’s client strategy director, said: “The brighter views on what the general economy has in store for us … could even be seen as the proverbial green shoots of recovery.”
