Retail sales plummet as shoppers hit by the cost of living crisis cut spending
Figures released by the Office for National Statistics show that retail sales fell 1.4% between February and March, while online sales fell nearly 8%. The amount of fuel purchased decreased by 3.8%
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Shoppers reduced spending last month as the cost of living crisis forced households to cut back on unnecessary spending.
Today’s Office for National Statistics figures showed that retail sales fell 1.4% between February and March, almost five times more than analysts had predicted.
Online sales plummeted nearly 8% as people reduced discretionary spending in the face of a surge in essential bills like groceries and energy.
This was followed by a 6.9% decline in the volume of goods purchased online in February.
And the amount of fuel purchased fell 3.8% as drivers cut non-essential trips to save money after a rise in fuel prices.
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A survey by the opinion research institute GfK showed that consumer confidence is in free fall.
People are more concerned about the outlook for the broader economy than they were after the 2008 financial crash.
Darren Morgan, director of economic statistics at the ONS, said: “Retail sales fell notably in March as rising cost of living weighed on consumer spending.”
The ONS said recent surveys found that 54% of adults said they were spending less on non-essentials because of the increased cost of living.
The quantity bought in supermarkets and other grocery stores fell 1.1% over the past month.
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The ONS said the drop was not only money saved but also due to others who still had money to eat out and socialize as Covid-19 restrictions come to an end.
Experts believe more falls could be on the way.
Samuel Tombs, UK chief economist at consultancy Pantheon Macroeconomics, said: “The sharp drop in retail sales in March looks more like the start of a streak of weakness in consumer spending than just a blip.”
He added that this likely means that any future Bank of England interest rate hike is likely to be smaller than first thought.
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