Rainfall washes out retail sales in March
UK retail sales dropped by 0.9% in March compared to February, according to the Office for National Statistics (ONS). Retailers blame the wet weather for the fewer number of shoppers.
Non-food retailers were the hardest hit, with department stores and clothing shops reporting a drop in volumes. Food shops also saw a decline in sales, down by 0.7%, mainly due to shortages of some products.
The ONS reports that 26% of adults experienced shortages of essential food items, up from 18% in February. Inflation in March reached 10.1%, higher than expected, mostly due to the rising cost of food. Despite the March dip, retail sales for the first quarter grew by 0.6% compared to the previous three months. Capital Economics believes this marks the end of the 18-month retail recession.
However, sales could still be tempered by a further rise in the interest rate when the Bank of England meets in May, putting further pressure on consumer spending.