The latest official numbers show that heavy rainfall and household budget constraints reduced expenditure last month.
According to experts, a drop in retail sales last month could be largely attributed to an adverse weather event.
The Office for National Statistics (ONS) reported a 0.9% decline in retail sales volumes in March. The first monthly decline of the year to date and worse than the 0.5% drop predicted by economists.
Weather was the main reason non-food sales dropped 1.3% from the previous month, according to retailers.
The performance also reflected the ongoing impact of inflation on consumers’ finances. With separate ONS data released earlier this week revealing the highest food inflation since 1977.
The ONS data revealed that food volumes decreased by 0.7%.
Retail sales productivity also rose 0.6% in the first quarter.
Director of economic statistics at the ONS, Darren Morgan, stated, “Retail fell sharply in March due to the influence of poor weather on sales across almost all sectors.
“However, the broader trend is less subdued, as retailers’ robust performance in January and February has resulted in a positive three-month picture for the first time since August 2021.
“In the most recent month, department stores, apparel stores, and garden centers experienced steep sales declines due to heavy rainfall, which dampened consumers’ desire to go shopping.
Retailers reported declining food store sales due to rising food and living costs.
The numbers are significant because consumer spending is the largest component of the United Kingdom’s economy. Which is presently flatlining, but which the Bank of England believes will avoid recession without further shocks.
It is widely anticipated that the Bank of England will implement its twelfth consecutive increase in interest rates next month to continue its fight against persistent inflation, thereby increasing the cost of borrowing.
There are indications that the outlook for consumer expenditure is improving despite the current economic climate.
Consumer confidence was the highest since February 2014, when Russia invaded Ukraine, according to a closely monitored study.
The GfK Consumer Confidence Index increased for the third consecutive month but remained negative at -30.
Respondents reportedly have a more optimistic view of their finances and the economy as a whole.
Joe Staton, director of the client strategy at GfK, stated, “The more optimistic outlook for the economy’s future could be viewed as the proverbial green shoots of recovery.”
