There was a worse-than-expected performance for retail sales last month, defying predictions of a consumer-led recovery from recession for the UK economy.
The Office for National Statistics (ONS) reported that sales volumes remained stable in March, following an upwardly revised figure of 0.1% in the previous month.
He said sales at non-food stores helped offset declines at supermarkets.
Fuel sales grew 3.2%.
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ONS senior statistician Heather Bovill said of the bigger picture: “Retail sales did not record growth in March.
“Hardware stores, furniture stores, gas stations and clothing stores reported an increase in sales.
“However, these gains were offset by falling food and department store sales, where retailers say higher prices have affected trading.
“Looking at the long-term scenario, in the last three months retail sales have increased after a bad Christmas.”
Although performance does not harm the expected exit from recession during the first quarter of the year, suggests that consumers are still carefully managing their spending.
‘The economy has turned a corner’
While the cost of living crisis – aggravated by Bank of England interest rate rises to boost inflation – severely damaged budgets, wage growth has been rising at a faster rate than prices since last summer.
Separate ONS data this week showed the annual inflation rate is at 3.2% – with wages growing at a rate of 6% when the effects of bonuses are stripped out.
Economists widely believe that consumers’ purchasing power will prevail as the year progresses, despite borrowing costs remaining at high levels.
Inflation slows to 3.2%
A measure of consumer confidence released on Friday showed that confidence rose for the sixth consecutive quarter, reaching the highest level since the summer of 2021.
Deloitte’s measure showed an increase of 6.5 percentage points compared to this period last year.
Their research cited an improvement in personal finances as inflation decreased.
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The company’s consumer insights lead, Celine Fenech, said of its findings: “It’s encouraging to see that consumers are feeling more confident in their personal finances – especially younger consumers.
“Many consumers are paying less for essential goods such as utility bills… however, spending on non-essential goods and services fell this quarter, meaning that improved confidence is not yet translating into a significant increase in spending, requiring cautious optimism.”
She added: “Consumer confidence at its highest level in two and a half years, combined with expectations for the weather to improve, should signal a brighter outlook for the consumer sector.”
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