Easter helps retail sales improve for boost after difficult start to year

Retail sales improved in March, largely driven by an early Easter but providing a boost to firms after a difficult start to the year, figures suggest.

Total UK retail sales were up by 3.5% on last March, above the three-month average of 2.1% and the 12-month average of 2.9%, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.

Food sales increased by 6.8% year on year, driven by Easter falling unusually early and the subsequent uplift ahead of the long weekend.

Easter also boosted sales of products such as cookware and tableware, as people readied themselves to host family and friends. Home textiles such as throws and pillows were also popular as consumers sought to spruce up their homes ahead of spring.

Elsewhere, wet weather dampened sales of garden furniture, barbecues, DIY products, and clothing and footwear.

Online sales continued to slide, falling by 1.4% despite strong performances in home accessories, health, beauty, and homewares.

BRC chief executive Helen Dickinson said: “After a difficult start to the year, retailers are hopeful that with warmer weather around the corner, consumer confidence will spring back up.

“A strong retail industry can boost investment across our towns and cities, and as we gear up for a general election, it is essential the next government recognises this and rethinks the burdensome costs imposed on retailers.”

Linda Ellett, UK head of leisure and retail consumer markets at KPMG, said: “An early Easter showed green shoots of spring for retailers in March, with sales growth up a more positive 3.5% on last year, and above headline inflation for the first time in more than two years.

“As April signals big increases in the sector’s cost base – through the rise in minimum wage rates and business rate hikes for the larger high street brands – retailers will be hoping that the bounce back of March sales is more than just an Easter blip.

“Economic indicators are heading in the right direction with inflationary pressures easing and interest rates having potentially peaked, however consumer confidence remains fragile, and households continue to keep a close eye on where their tight budgets are being spent.”

Separate figures from Barclays suggest consumer card spending growth flatlined in March, on a par with February’s 1.9% uplift, largely due to a slowdown in non-essential spending as wet weather dampened both retail and restaurant sales.

Retail spending remained almost flat, up 0.7%, while restaurants had another challenging month, down 12.6% and almost consistent with the February’s 13.4% decline.

It comes as Barclays found 45% of consumers report they are continuing to rein in discretionary spending, with 53% of this group cutting back on buying clothing and accessories and 47% spending less on dining out.

Karen Johnson, head of retail at Barclays, said: “Retailers were braced for a more subdued start to 2024, and recent figures are in line with expectations. The wet weather has been a key factor in the slowdown in discretionary spending, as it’s meant fewer visits to the high street and to hospitality venues.

“However, in spite of this initial lull, many retailers are confident that spending will rebound in the coming months, particularly in anticipation of better weather, the energy price cap drop, an uplift in the National Minimum Wage, and the buzz around major events such as Taylor Swift’s Eras Tour and the Paris 2024 Olympics.”

Opinium surveyed 2,000 UK adults between March 22-26.