Retail sales remain flat as department stores and food take a hit

UK retail sales volumes stagnated last month as department stores, food and non-store retail took a hit.

Retailers have indicated that increased prices were impacting consumer spending habits across these categories in March.

According to the latest ONS figures, department store sales were down by 3.8 per cent across the month, while food stores saw a decline of 0.7 per cent.

Non-store retail, which includes mainly online retailers but also other retail formats without a physical store presence like stalls and markets, saw a 1.5 per cent drop in sales over the four-week period.

Matt Jeffers, retail strategy and consulting managing director for Accenture UK & Ireland said that with inflation falling to its lowest level in two and a half years, many retailers will be "disappointed" to not see a rebound in sales.

But non-food store sales volumes - including department stores, clothing, household, and other non-food categories - increased by 0.5 per cent after some retailers reported increased footfall over the period.

Higher footfall was recorded by ONS across stores selling second-hand goods, hardware, furniture, and clothes.

Despite flat performance reported for both February and March, Erin Brookes, European retail and consumer lead at Alvarez & Marsal said the quarter was still the "best since the pandemic", even during the wettest winter on record.

"Strong non-food sales, particularly for household goods, were driven by the early Easter bank holiday footfall," she continued. "Retailers managed to take advantage of the opportunity and got their strategies right, emphasising newness for spring and summer through marketing and their own channels, and backing this up with product availability."

Kris Hamer, director of insight at the British Retail Consortium said that while consumer confidence remains week, it's still "well above" the levels seen last year.

"Large ticket items like furniture continued to sell badly as consumer spend remains restrained by the high cost of living, and footwear sales were impacted by the poor weather," he continued. "With brighter weather on the way, retailers are starting to plan their summer collections, and are hopeful that consumers will be looking to refresh their homes and wardrobes.”

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