British retailers saw sales drop last month as unsettled weather hit demand for clothes while takings at grocers were hurt by lower food prices and Easter closures, industry figures show.
The British Retail Consortium (BRC) said like-for-like sales fell 0.7% in March on a year earlier, the biggest drop since last August. Sales were flat on a year ago in total terms, which does not adjust for the effect of new store openings.
The trade group said its latest figures were distorted by the timing of Easter, which fell in March this year as opposed to April in 2015. But it said the underlying trend was weak, with rolling 12-month average sales growth at just 1.4%, the slowest pace since last August.
The BRC’s chief executive, Helen Dickinson, described the March figures as relatively disappointing and said retailers were also feeling longer-standing pressures.
“This slowdown can’t be viewed in isolation; retail is an industry undergoing significant structural change as the investment in the digital offer continues apace while, from a consumer perspective, more disposable income is being spent on leisure and entertainment,” she said.
Some economists had expected the earlier Easter to boost sales, as it has done in previous years when people splash out on seasonal foods and gifts. But the BRC report noted the opposite effect, with pressure on food sales from stores closing on Easter Sunday. There was also an impact on clothes from the Easter timing as well as the poor weather, the report said.
David McCorquodale, head of retail at KPMG, the report’s co-authors, said: “Earlier Easters are not always good for the fashion industry as consumers are put off purchases of lighter fashions and footwear in cooler temperatures and this was certainly the case this year.
“However, furniture and home accessories benefited from consumers taking on home improvement projects over the long weekend while the ‘Mother’s Day effect’ boosted sales of jewellery and watches.”
Consumer spending has been the main driver of economic growth in the UK in recent months and the March sales lull will add to worries the UK economy is losing steam. Other reports have pointed to a drop in business and consumer confidence in the UK in the face of a global economic slowdown and a closely fought referendum on EU membership in June.
