UK retail sales see biggest surge since August, thanks to early Easter

Easter boosts UK retail: UK retail sales witnessed a boost in March, driven primarily by increased spending on food due to the early Easter period, according to the British Retail Consortium (BRC). This surge marked the strongest growth since August, although overall consumer demand remained subdued due to adverse weather conditions dampening sales of other goods.

Following a period of economic recession in the latter part of the previous year, recent data indicated a tentative return to modest growth in the first quarter of this year, attributed partly to easing inflation pressures.

Retail spending soars

The BRC reported a 3.5 per cent year-on-year (YoY) increase in total retail spending for March, up from a 1.1 per cent rise in February. Notably, this growth outpaced the most recent consumer price inflation figures for the first time in over two years. However, these figures are not adjusted for seasonal variations, with the earlier occurrence of Easter this year compared to 2023 contributing to the surge in food sales.

Helen Dickinson, CEO, BRC, highlighted that while the growth in retail sales improved in March, it was primarily due to the early Easter period, which boosted food sales leading up to the long weekend. Conversely, sales of items such as garden furniture, home improvement products, clothing, and footwear were adversely impacted by the wet weather experienced throughout the month.

The Met Office reported that the UK witnessed 27 per cent more rainfall than average in March, with some southern counties experiencing double the normal amount.

Over the first quarter of the year, food sales saw an increase of 6.8 per cent compared to the previous year, whereas non-food spending saw a decline of 1.9 per cent.

Consumer spending analysis

Barclays' data revealed that consumer spending growth, a broader measure than retail sales, remained at 1.9 per cent in March, matching its lowest annual rate since September 2022. Despite factors such as the release of "Dune 2" in cinemas and events like St Patrick's Day and rugby fixtures providing a boost to certain sectors, overall consumer demand remained tepid.

Looking ahead, businesses are optimistic that demand will pick up in the coming months, driven by factors such as improved weather conditions, lower energy prices, higher wage growth, and anticipated events like Taylor Swift concerts and the Olympics, according to Karen Johnson, head of retail at Barclays.

(With Reuters Inputs)