UK retail sales slowed in March

Date : 14 April 2022

The latest release from the British Retail Consortium Retail Sales Monitor show that UK retail sales grew by 3.1% in March. Non-food categories continue to provide the key upsides, but food sales, which were down 6.1%, proved to be a particular drag due to the timing of Easter in 2021, which was compounded by the impact of the ongoing pandemic restrictions in March last year.

Three-month food & drink sales down 2.6%

For the 13-week period covering January to March, UK food & drink sales fell by 2.6% on a total basis, and 3.1% on a like-for-like basis. Given the tough lockdown-boosted comparatives from last year, when food sales grew 6.6%, this decline in the quarterly performance is unsurprising. Nevertheless, the decrease is the steepest ever recorded in the food category and compares with 0.1% quarterly growth in the three months of December 2021 to February 2022. The timing of Easter this year had a particular impact on March sales, with retailers not yet having seen the boost in spending leading up to Easter weekend. According to the BRC-NielsenIQ Shop Price Index (SPI), food price inflation saw a clear step-up in March, rising to 3.3% from 2.7% in February.

Non food online sales fell by 29%

Trading up against the lockdown period in 2021, when online penetration stood at 63.0%, non-food sales online have continued to drop back sharply and in March 2022 penetration was down to 38.5%. However, this remains solidly elevated on the same month in 2019 when penetration was 29.3%. While many significant non-food categories are maintaining levels of online penetration well above the average such as furniture and clothing, there are others, notably health & beauty (at 14.5%) where penetration has remained notably more restrained throughout the whole pandemic episode.

Susan Barratt, Chief Executive, IGD commented:

‘Food and drink sales struggled in March, partly due to facing strong comparatives to 2021. Not only were sales elevated last year due to lockdown, but Easter was also earlier and we’re yet to see holiday spending ramp up this year. It is no surprise that shopper confidence continues to fall and is now lower than the previous low of December 2013 when the horsemeat scandal impacted the food industry. There was a brief peak in confidence when it looked like oil prices might come down, but with 50% of shoppers now expecting food prices to become much more expensive, this optimism was short-lived. These challenges affect shoppers in different ways, with household cutbacks seeing less affluent shoppers skipping meals to save money. This volatile time is set to continue as the reality of the energy price increase, as well as general inflation, hits home for shoppers.’