Mother’s Day boost for UK bricks and mortar retailers but major challenges continue to loom large

The wettest March in over 40 years dampened UK sales growth for fashion, gardening and DIY products, but stores were at least given a Mother’s Day boost, as last minute shoppers dashed to their local high streets and shopping centres to purchase jewellery, fragrances and flowers.

According to research from BRC and KPMG, UK total retail sales increased by 5.1% in March, against an increase of 3.1% in March 2022.

This is above the three-month average growth of 4.8% and the 12-month average growth of 2.6%.

Paul Martin, UK Head of Retail at KPMG, comments: “Many retailers hoping for a Mother’s Day boost will have been disappointed with overall sales growth of just 5% in March, against a backdrop of rising inflation running at more than 10%.”

“High street retailers saw some limited growth across most categories in March, but as consumers cut back on eating out, spending on home comforts, accessories and furniture saw the biggest growth with people looking to entertain at home instead.”

“Online retailers also benefited from the boost in sales of  home items, but saw continued decline in sales across most other categories, particularly clothing.”

He adds: “As we enter April, rising utility costs, council tax and mobile bills coupled with frozen personal tax rates and the withdrawal of energy bill support will see consumers having to further cut back on discretionary spending.”

“Consumers will continue to take steps to reduce spend where they can - switching where they shop, what they buy, and spending on fewer items.”

“The challenge for retailers right now is having to face into their own rising cost agenda, as the rise in minimum wage rates comes into effect and inflation continues to challenge margins, whilst ensuring affordability, choice and value for customers, which will be key to keeping the tills ringing.”

“As the difficult economic conditions continue, retailers will be hoping that April prompts consumers to look for some comfort in Easter treats and the sun starts to shine forcing replenishment of summer wardrobes.”

Susan Barratt, CEO at IGD, says: “UK food and drink sales in March followed a similar pattern as previous months, with volume sales continuing to be negative and value sales positive. As such, inflation continues to loom heavily over shoppers.”

“Retailers are striving to deliver value with loyalty schemes, quality private label products and meal solutions that enable consumers to recreate restaurant experiences at home.”

“Customer sentiment is stabilising, with our Shopper Confidence Index remaining flat in March. Coupled with our prediction that food price inflation will decline from 18% to 8% by the end of the year, shoppers are becoming less fearful.”

“Fewer now expect food prices to get much more expensive in the year ahead (33% compared to 53% in August ’22) and fewer plan to cut back their spend across a range of activities including on food and groceries and eating out.”