An early Easter showed green shoots of spring for retailers in March, with sales growth up on last year, and above headline inflation for the first time in more than two years.
According to the latest BRC-KPMG Retail Sales Monitor for March 2024, UK Total retail sales increased by 3.5% year on year in March, against a growth of 5.1% in March 2023. This was above the 3-month average growth of 2.1% and the 12-month average growth of 2.9%.
Food sales increased 6.8% year on year over the three months to March, against a growth of 8.5% in March 2023. This is below the 12-month average growth of 7.7%. For the month of March, Food was in growth year-on-year.
Non-Food sales decreased 1.9% year on year over the three-months to March, against a growth of 1.8% in March 2023. This is steeper than the 12-month average decline of 1.1%. For the month of March, Non-Food was in decline year-on-year.
In-store Non-Food sales over the three months to March decreased 1.1% year on year, against a growth of 5.2% in March 2023. This is below the 12-month average of 0.0%.
Online Non-Food sales decreased by 1.4% year on year in March, against a decline of 2.1% in March 2023. This was shallower than the 3-month and 12-month declines of 3.1% and 2.8% respectively.
The online penetration rate (the proportion of Non-Food items bought online) decreased to 36.6% in March from 36.8% in March 2023. This was higher than the 12-month average of 36.2%.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “While retail sales growth improved last month, this was largely driven by Easter falling unusually early and the subsequent uplift to food sales in the week preceding the long weekend. Easter also boosted sales of non-food 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, BBQs, DIY products, and clothing and footwear.
“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. With a pro-growth policy landscape, retailers can step up their investment in innovation and in local jobs and communities up and down the country.”
Linda Ellett, UK Head of Consumer Markets, Leisure & Retail, KPMG, said: “High street sales growth was driven by food and drink, health and beauty and keen gardeners who headed outside to enjoy the first days of spring. There were also some signs of improvement with more categories starting to see positive sales growth in March for the first time in months. Online sales, however, continued to slide, falling by 1.4% despite strong performances in home accessories, health, beauty, and homewares.
“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.
“It remains a challenging environment, but as we head into the warmer months, retailers will be hoping that stronger consumer confidence will turn into stronger retail sales, especially in more discretionary categories such as clothing, following an incredibly difficult few years.”
