Retail sales dip as shoppers scrap non-essential items

Overall sales dropped by 1% in March on a like-for-like basis, on the back of a 0.7% drop the previous year, according to data from the British Retail Consortium (BRC) and KPMG. 

In the five weeks to April 1, total retail sales dipped 0.2%. This is compared with flat growth in March 2016.

However, as BRC chief executive Helen Dickinson points out, last month’s figures are negatively distorted by the timing of Easter this year.

“First impressions of March’s sales figures are underwhelming, with the first decline since August last year.

”That said, the distortion which results from the timing of Easter always makes spring a tricky period to assess and the later timing of the holiday this year certainly detracted from last month’s performance,” she said. 

Non-food sales

In the three-months to March, non-food retail sales declined 1.1% on a like-for-like basis and 0.8% on a total basis – the lowest three-month average since May 2011.

But, while the slowdown in non-food growth persists, Dickinson said Mother’s Day gift purchases provided “some compensation”, boosting sales of beauty and stationary items.

KPMG head of retail Paul Martin added: “Women’s footwear certainly stepped up, encouraged by the arrival of spring collections.”

Food sales

Food sales continue to outperform non-food as, Dickinson explained, shoppers prioritise buying “only essential items”.

In the first three months of this year, food sales decreased 0.2% on a like-for-like basis and increased 1.2% on a total basis.

The slim growth was driven in part by rising inflation, Dickinson said. 

“This marginal growth in food was bolstered by slightly higher shop prices following increases in global food commodity costs and a weaker pound.”

Will Easter put a spring in shoppers’ steps?

“Retailers will be hoping Easter boosts retail sales in April, whether it’s shoppers making the most of the holiday or those choosing to spruce up their homes,” Martin said.

“The new tax year marks further pressure on margins in the form of the apprenticeship levy and business rate changes, therefore tighter cost management and a focus on efficiency is more important than ever.”

Dickinson added: “The pressure on prices continues to build, albeit slowly, and will inevitably put a tighter squeeze on disposable income and so to ensure consumers continue to enjoy great quality, choice and value on goods, securing tariff free-trade must be the priority as the Brexit negotiations begin in earnest.”

Online sales

In the three-months to March, online sales of non-food products grew 7.4%.

43% of shoppers said they bought some of their groceries online in March, while 60% stated an intention to shop online for food over the next three years.