Retail sales and footfall remain low as consumer confidence drops

Year-on-year retail sales fell 0.4% in March with consumer confidence taking its sharpest hit since 2008, according to the latest data from the British Retail Consortium (BRC) and Big Four accountants, KPMG.

Despite total sales rising by 3.1% on 2021 figures, like-for-like sales fell compared to March 2021, despite restrictions on trading in place due to the Covid-19 pandemic at that time. Retail footfall also remains below pre-pandemic figures, down over 15% on March 2019.

The BRC and KPMG have attributed to the decline in retail sales to rising costs of living, in particular, fuel and household bills, but warn that sales may continue to slow as incomes feel the pinch of continued high inflation. More general economic uncertainty over the ongoing war in Ukraine was also acknowledged as a contributing factor.

Don Williams, retail partner at KPMG, commented:

“Sales growth in March rose at the slowest rate so far this year, suggesting clouds on the horizon as household budgets come under pressure from rising costs, an increasing tax burden and competition from holidays. There is concern on what this could mean for consumer confidence and the impact on discretionary spend.”

Helen Dickinson, BRC Chief Executive said:

“As consumer confidence continued to sink, March saw sales slow, and while spend remained above last year this likely reflects higher prices.

“The rising cost of living and the ongoing war in Ukraine has shaken consumer confidence, with expectations of people’s personal finances over the next 12 months reaching depths not seen since the 2008 financial crisis. Furthermore, households are yet to feel the full impact of the recent rise in energy prices and national insurance changes.

“Ultimately, consumers face an enormous challenge this year, and this is likely to be reflected in retail spend in the future.”