March marked ‘truly disappointing’ end to first quarter for retailers
Retail sales in March marked a “truly disappointing” end to the first quarter of 2019 as shoppers continued to hold off on big ticket purchases amid Brexit uncertainty, a report has said.
Total sales fell by 0.5% year on year in March, compared with a 2.3% annual increase seen in March 2018, according to the BRC (British Retail Consortium)-KPMG retail sales monitor.
Like-for-like retail sales decreased by 1.1% year on year, following a 1.4% annual increase in March 2018.
The report was released as Barclaycard found consumer confidence in the UK economy has plunged to its lowest levels since at least 2014 – with nearly seven in 10 people not feeling confident.
Sue Richardson, retail director UK, KPMG, said: “March marked a truly disappointing end to the first quarter of 2019 for retailers.
“Not only did total sales fall 0.5% compared to the same month last year, but no further clarity around Brexit came to light, and shoppers continue to waiver.
“Not all categories or channels suffered the same fate though, with clothing generally bagging a welcome reprieve thanks to more favourable weather – especially when compared to the Beast from the East this time last year.
“However other categories, mainly big ticket items including furniture, remained overlooked.
“Online sales may have performed better than the high street, but the high proportion of sales occurring online actually nods towards the underlying issue of profit pressure.”
She said retailers will be hoping for an end to the “sustained uncertainty”.
The report said that, even taking into account the fact that Easter falls in April this year, whereas last year it took place in March, retail sales still slowed.
It said one way of correcting the distortion is looking further back, to two years ago, since sales in March last year were boosted by Easter.
On a two-year basis, retail sales growth showed a slowdown, it said.
Helen Dickinson, chief executive of the BRC, said: “Retail sales slowed in March, even when the Easter distortions were accounted for, as greater uncertainty caused people to hold off from splashing out.
“While jewellery, beauty products and clothing purchases were all up to indulge on Mother’s Day, shoppers were generally cautious not to overspend, particularly on larger items.
“Brexit continues to feed the uncertainty among consumers.”
Meanwhile, a separate report from Barclaycard said the warmer weather in March, in contrast to last year’s Beast from the East, helped to boost spending in pubs as people were encouraged outdoors.
It said pub and restaurant spending recorded annual increases of 15.1% and 12.1% respectively, as people made the most of the opportunity to relax and dine out.
But a survey of 2,000 people by Barclaycard found confidence in the UK economy has fallen to its lowest level since it started tracking data in 2014.
Nearly seven in 10 (69%) of people say they do not feel confident in the strength of the UK economy, and nearly half (46%) are worried that their quality of life will decline due to Brexit.
Just over three in 10 (31%) are concerned that the rising cost of everyday items will make life harder for them, and 17% are worried about shortages of medicines and other emergency products.
But many people are unwilling to give up spending on non-essentials – with 40% saying they will always spend on things such as social events, quality food and mini-breaks.
One in 10 (10%) said they will never part with personal entertainment, such as their Netflix subscription.
Esme Harwood, director at Barclaycard, said: “In contrast to the extreme weather conditions experienced last year, a milder March resulted in an uplift in spending, with consumers dining out and making the most of the welcome sunshine.
“Despite this, underlying sentiment is cautious. March was characterised by ongoing uncertainty around Brexit, with consumers concerned about an impact on food prices and supplies.
“In light of this, consumer confidence in the UK economy is the lowest it’s been since we began recording this data.”