- Retail sales rose by 0.7% in March, but if you strip away fuel sales that falls to just 0.2%
- February’s sales fall has been revised down to 0.6% from 0.4%
- Over the three months to March the picture is still positive – sales are up 1.6% compared with the previous quarter
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK retail sales figures:
“The jump in retail sales in March actually heralds bad news for the sector, as consumers rushed to fill up their vehicles amid rising petrol and diesel prices.
“Not only was the increased price of a tank eating into household budgets, but some motorists were bringing forward this purchase. There have been concerns about rising prices and potential shortages as a result of the war in the Middle East which have so far not materialised.
“People can only spend a pound once and if they’re choosing to shell out more than normal on fuel, they’ll have less to spend on other purchases.
“Add in today’s consumer confidence figures from GfK and you can see households are really nervous about what’s to come. They’re still haunted by their last brush with raging inflation and doing everything they can to make sure they can weather the coming storm. Instead of splurging, many people are saving and padding out their emergency pots.
“But as always, a bit of sunshine gives consumer confidence a boost and people have still allowed themselves to splash out on desirable new tech or add a few key pieces to their spring wardrobe.
“The big winners are companies like L’Oréal who provide those little luxuries without taking a big chunk out of our discretionary budgets. A new fragrance, lipstick or some skin care can make people feel better as they deal with the deteriorating economic picture around them.
“But when you consider that March’s figures this year included Good Friday, you get a measure of how cautious people are being with their cash. If prices for essentials do spike and the weekly shop becomes an increasingly painful chore, then the already bruised retail sector is likely to take another punch.”
