The latest data released today (22 April) by the Office for National Statistics (ONS) shows clothing store retailers saw sales volumes fall by 0.5% in March.
Overall, UK retail sales volumes fell by 1.4% last month, following a fall of 0.5% (revised from a fall of 0.3%) in February. Sales volumes were 2.2% above their pre-coronavirus (Covid-19) February 2020 levels.
The largest contribution to the fall came from non-store retailing in which sales volumes fell by 7.9% over the month following a fall of 6.9% in February; despite these drops, sales volumes were 20.3% above their pre-coronavirus February 2020 levels.
Department stores reported a monthly fall of 0.1% in sales volumes, while clothing stores sales volumes were down by 0.5%.
Related
Retail sales values, unadjusted for price changes, fell by 0.2% in March, following a rise of 0.4% in February. When compared with February 2020’s pre-coronavirus level, total retail sales were 10.1% higher in value terms.
Meanwhile, the proportion of retail sales online fell to 26% in March, its lowest proportion since February 2020 (22.7%), continuing a broad downward trend since its peak in February 2021 (37.1%).
Despite the ongoing trend, the proportion of sales made online is still above its level of 19.6% in February 2020 before the pandemic.
Online spending values fell by 6% month-on-month because of strong falls in non-store retailing (negative 10.4%) and other non-food stores (negative 9.6%).
Consumers spending less on clothing
Oliver Vernon-Harcourt, head of retail at Deloitte, notes sales volumes and values tumbled for a second consecutive month in March by –1.4% and –0.2% respectively.
“These results point to consumers reining in their retail spending as the rising cost of living continues to bite.
”Inflation on food, fuel and household goods is adding pressure to already squeezed consumer spending power. With UK consumer confidence falling steeply in the first quarter of the year, it could signal the start of consumers making some cuts as they pay more for essential items. Our data indicates consumers are spending less on large-ticket items, such as furniture and major household appliances as well as some other discretionary categories such as clothing and footwear. Of those who are spending less, 54% indicate they are doing so to save money, 35% said they are choosing cheaper brands or stores and 25%are taking advantage of sales or discounts.
“The next few months will see further disruptions to supply chains and cost pressures. Consumers will also feel the pinch, particularly around discretionary spending, with April seeing the introduction of energy price cap rises and national insurance increases. The retail industry will need to balance increasing costs with maintaining customer engagement. It will be key to make sure the right products and services are available, and at a price point that meet consumers thriftier spending habits.”
Meanwhile, Lynda Petherick, head of retail for Accenture in the UK and Ireland, says retailers expecting better times ahead post-pandemic will have been left dispirited this year as the skyrocketing cost of living has seen the sector move from one existential crisis to another.
“Good weather usually means sunnier times for retail, and firms will hope that the summer months can play a small part in stimulating waning confidence among a general public coping with the harsh realities of rising prices everywhere they turn. In reality, each day brings fresh warnings from business leaders that prices will likely continue to climb, driving consumer confidence in the wrong direction for retailers.
“Retailers are having to contend with rising manufacturing and operating costs, while food retailers are having to cope with scarcity of certain products. Firms with clear oversight of their whole supply chain and strong relationships with their suppliers will be best placed to adapt to the challenges ahead.”
Last month, ONS data revealed a 13% rise in UK clothing store sales volumes in February, which may have been linked to wider socialising and a return to the office following the lifting of Plan B restrictions at the end of January.
Related Companies
