Shoppers hold off on ‘big ticket’ purchases amid Brexit uncertainty
Retail sales in March marked a “truly disappointing” end to the first quarter of 2019 as shoppers continued to hold off on big ticket purchases amid Brexit uncertainty, a report has said.
Total sales fell by 0.5% year on year in March, compared with a 2.3% annual increase seen in March 2018, according to the BRC (British Retail Consortium)-KPMG retail sales monitor.
Like-for-like retail sales decreased by 1.1% year on year, following a 1.4% annual increase in March 2018.
The report was released as Barclaycard found consumer confidence in the UK economy has plunged to its lowest levels since at least 2014 - with nearly seven in 10 people not feeling confident.
Sue Richardson, retail director UK, KPMG, said: “March marked a truly disappointing end to the first quarter of 2019 for retailers.
“Not only did total sales fall 0.5% compared to the same month last year, but no further clarity around Brexit came to light, and shoppers continue to waiver.
“Not all categories or channels suffered the same fate though, with clothing generally bagging a welcome reprieve thanks to more favourable weather - especially when compared to the Beast from the East this time last year.
“However other categories, mainly big ticket items including furniture, remained overlooked.
“Online sales may have performed better than the high street, but the high proportion of sales occurring online actually nods towards the underlying issue of profit pressure.”
She said retailers will be hoping for an end to the “sustained uncertainty”.
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The report said that, even taking into account the fact that Easter falls in April this year, whereas last year it took place in March, retail sales still slowed.
It said one way of correcting the distortion is looking further back, to two years ago, since sales in March last year were boosted by Easter.
On a two-year basis, retail sales growth showed a slowdown, it said.
Helen Dickinson, chief executive of the BRC, said: “Retail sales slowed in March, even when the Easter distortions were accounted for, as greater uncertainty caused people to hold off from splashing out.
“While jewellery, beauty products and clothing purchases were all up to indulge on Mother’s Day, shoppers were generally cautious not to overspend, particularly on larger items.
“Brexit continues to feed the uncertainty among consumers.”
Meanwhile, a separate report from Barclaycard said the warmer weather in March, in contrast to last year’s Beast from the East, helped to boost spending in pubs as people were encouraged outdoors.
It said pub and restaurant spending recorded annual increases of 15.1% and 12.1% respectively, as people made the most of the opportunity to relax and dine out.