Wet Weather Blamed as UK Retail Sales Fall by 0.9 Percent in March

Members of the public shelter from the rain under umbrellas on Westminster Bridge in London, on March 9, 2023. Jordan Pettitt/PA Media

UK retail sales fell in March as businesses blame poor weather for discouraging people from heading to the shops.

According to the latest data released by the Office for National Statistics (ONS), retail sales volumes dropped by 0.9 percent last month, with clothes shops, department stores, and garden centres all reporting declines.

The decline—which came after a 1.1 percent increase in sales volumes in February—was heavier than expected, as economists had previously predicted a 0.5 percent decline for the month.

However, sales volumes rose by 0.6 percent in the three months to March 2023 when compared with the previous three months. This was the first quarter-on-quarter rise since August 2021.

Darren Morgan, ONS director of economic statistics, said: “Retail fell sharply in March as poor weather impacted on sales across almost all sectors.

“However, the broader trend is less subdued as a strong performance from retailers in January and February means the three-month picture shows positive growth for the first time since August 2021.

“In the latest month, department stores, clothing shops, and garden centres experienced heavy declines as significant rainfall dampened enthusiasm for shopping.

“Food store sales also slipped, with retailer feedback suggesting the increased cost of living and climbing food prices are continuing to affect consumer spending.”

Food Inflation

Non-food stores sales volumes fell by 1.3 percent in March 2023, following a rise of 2.4 percent in February, with feedback from retailers that poor weather conditions throughout most of March affected sales.

Food store sales volumes fell by 0.7 percent in March 2023, following a rise of 0.6 percent in February 2023.

Shoppers in a supermarket in the UK on Oct. 15, 2021. Aaron Chown/PA Media

Food sales “may have been affected by shortages” of some food products, said the ONS.

Supermarkets introduced limits on the number of certain items—such as tomatoes, peppers, and salad—that shoppers could buy during the month after supply was impacted by poor weather in northern Africa and Spain.

The figures showed that the amount of food bought by shoppers is 3 percent lower than before the COVID-19 pandemic hit in February 2020.

However, the amount of money being spent by shoppers is significantly higher after soaring food inflation.

Earlier this week, the ONS said food inflation hit a 45-year-high of 19.1 percent last month.

This is despite the fact that Consumer Prices Index (CPI) inflation fell to 10.1 percent in March from 10.4 percent in February.

According to Which?, a UK consumer group, overall inflation on food and drink at supermarkets continued to rise in March to 17.2 percent, up from 16.5 percent the month before.

Cheddar cheese prices increased by an average 28.3 percent across eight major supermarkets, compared to a year ago.

The cost of porridge oats went up by an average of 35.5 percent, and large 800g loaves of sliced white bread saw an average increase of 22.8 percent.

Consumer Confidence Rising

Despite the retail sales slump, there are signs that consumer confidence is actually on the rise.

Lisa Hooker, industry leader for consumer markets at PwC, said: “The slowdown in March looks like it was a result of specific factors, and not indicative of a longer-term trend.

“So fresh food shortages earlier in the month limited grocery sales volumes, while the wettest March in England for over 40 years put a dampener on high street sales, with the likes of new season fashion and garden centre sales suffering as a result.

“However, while March’s rain may have washed out the green shoots from February, the overall momentum of the retail sector remains positive, and better than many expected at the start of 2023.”

It came after separate data from market research firm GfK showed that British consumers are the most upbeat in more than a year this month.

The consumer confidence index improved by 6 points to a reading of -30, representing the highest reading since February last year, before the Russian invasion of Ukraine which accelerated inflation.

Meanwhile, consumer’s expectations for their personal financial situation in the next 12 months improved by 8 points to -13.

Joe Staton, GfK’s client strategy director, said that there has been “a sudden flowering of optimism with big improvements across the board” in April—the third month in a row that confidence overall has improved.

He added: “The 8-point jump in how we see prospects for our personal financial situation is a dramatic change that might suggest household finances are stronger than we thought.

“The brighter views on what the general economy has in store for us, with April’s 6-point rise cementing a 20-point improvement since January, could even be seen as the proverbial ‘green shoots of recovery.’

“Moreover, the Major Purchase Index at -28 is higher than it has been for a year and will bring much-needed cheer to retailers as we head into summer.”

PA Media contributed to this report.