Sales hit by late Easter and consumers’ uncertainty
Published: 13 April, 2011
UK retail sales values were down 1.9 per cent on a total basis from March 2010, when sales had risen 6.6 per cent, boosted by Good Friday and Easter Saturday falling in the March trading period.
On a like-for-like basis, sales were 3.5 per cent lower, against a 4.4 per cent increase in March 2010.
Like-for-like food sales fell well below their year-earlier level and non-food sales showed an even larger decline. Consumers’ underlying uncertainty about jobs and incomes, as well as the later Easter, hit both. Big-ticket home and furniture purchases suffered most and sales achieved were often promotion-led.
Non-food non-store (internet, mail-order and phone) sales growth fell further in March. Sales were 7.5 per cent higher than a year ago, the smallest increase since the series began in October 2008 and much weaker than the 10.4 per cent in February.
BRC director general, Stephen Robertson, said: “This is the worst drop in total sales since we first collected these figures in 1995. Non-food retailers were particularly hard-hit. This is strong evidence of the pressure customers and traders are under. This year's later Easter is a factor but this fall goes way beyond anything that can be explained by that alone.
"Uncomfortably high inflation and low wage growth have produced the first year-on-year fall in disposable incomes for thirty years. Mounting fuel and utility costs, falling house prices, higher VAT and the prospect of more tax rises and job losses left people unwilling to spend unless they really had to. These pressures aren't going away and the arrival of higher National Insurance is likely to compound them in the immediate future.
"The next interest rate decision is a difficult balancing act for the Bank of England but, for now, supporting our weak economy must be the priority. Inflation is coming mainly from temporary and external price shocks - VAT, world commodity prices and the weak pound - not wage or consumer-driven increases. Increasing interest rates would do more harm than good."
