Early Easter boosts March retail sector performance

An early Easter has helped deliver a strong March for the retail sector, according to analysis from the British Retail Consortium (BRC).

The BRC’s analysis for the five weeks from 25 February to 30 March 2024 found retail sales were up 3.5% on the same period in 2023, and above both the 12-month and 3-month average performance of the sector (2.9% and 2.1% growth respectively).

With Easter falling at the end of the month, sales of food items and also some homeware items, saw an uptick as households prepared to entertain guests over the Bank Holiday weekend. Overall, food sales increased 6.8% over the three months to the end of March 2024.

Online retail saw a slight decline in market share compared to the previous year, down to 36.6% penetration, from 36.8% in March 2023.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said:

“While retail sales growth improved last month, this was largely driven by Easter falling unusually early and the subsequent uplift to food sales in the week preceding the long weekend. Easter also boosted sales of non-food products such as cookware and tableware, as people readied themselves to host family and friends. Home textiles such as throws and pillows were also popular as consumers sought to spruce up their homes ahead of Spring. Elsewhere, wet weather dampened sales of garden furniture, BBQs, DIY products, and clothing and footwear.

“After a difficult start to the year, retailers are hopeful that with warmer weather around the corner, consumer confidence will spring back up. A strong retail industry can boost investment across our towns and cities, and as we gear up for a general election, it is essential the next government recognises this and rethinks the burdensome costs imposed on retailers. With a pro-growth policy landscape, retailers can step up their investment in innovation and in local jobs and communities up and down the country.”

Linda Ellett, UK Head of Consumer Markets, Leisure & Retail, KPMG, said:

“An early Easter showed green shoots of spring for retailers in March, with sales growth up a more positive 3.5% on last year, and above headline inflation for the first time in more than two years.

“High street sales growth was driven by food and drink, health and beauty and keen gardeners who headed outside to enjoy the first days of spring.  There were also some signs of improvement with more categories starting to see positive sales growth in March for the first time in months. Online sales, however, continued to slide, falling by 1.4% despite strong performances in home accessories, health, beauty, and homewares.

“As April signals big increases in the sector’s cost base – through the rise in minimum wage rates and business rate hikes for the larger high street brands – retailers will be hoping that the bounce back of March sales is more than just an Easter blip.  Economic indicators are heading in the right direction with inflationary pressures easing and interest rates having potentially peaked, however consumer confidence remains fragile, and households continue to keep a close eye on where their tight budgets are being spent.  It remains a challenging environment, but as we head into the warmer months, retailers will be hoping that stronger consumer confidence will turn into stronger retail sales, especially in more discretionary categories such as clothing, following an incredibly difficult few years.”

On food and drink sector performance, Sarah Bradbury, CEO, Institute of Grocery Distribution, commented:

“The UK grocery market benefitted from Easter falling in March this year. This has led to very positive comparisons with spending increasing on March 2023, and importantly significant volume growth. This marks the fourth consecutive month of year-on-year volume growth, offering hope to retailers and suppliers of finally being able to regrow margins that have shrunk during the cost-of-living crisis.

“Shoppers faced a multitude of financial changes this month from the anticipation of ‘price hike Monday’ to the budget announcement that cut National Insurance for the second time in six months. At a total level, shoppers have a growing confidence in their financial outlook, however the strength of this growth varies by household income. For lower income households, confidence is growing at a slower rate despite news of an almost 10% increase to the national living wage. For all shoppers, we expect the cautious approach to continue as cost-of-living challenges remain.”