The UK retail consortium reported total sales up 3.1% in March from the same month last year, significantly lower than the 6.7% increase in February and the 12-month average growth rate of 10.3% . Comparing March to the same month in 2019 before the Covid pandemic spread, total sales rose 5.4% as retailers warned that rising inflation had begun to hurt consumer spending. Helen Dickinson, CEO of BRC, said it was possible that the strength in the overall value of retail sales reflected a rise in prices despite consumers rushing back to stores after the pandemic eased. “The rising cost of living and the ongoing war in Ukraine have shaken consumer confidence, with expectations for people’s personal finances over the next 12 months reaching depths they have not seen since the 2008 financial crisis,” he said. “Ultimately, consumers are facing a huge challenge this year, and this is likely to be reflected in retail spending in the future.” The latest snapshot of the retail industry showed an increase in spending on beauty and fashion items before Mother’s Day – March 27 – while the fact that people were gradually returning to cities and city centers led to an increase in demand for clothes. However, food spending fell by 6.1%, possibly due to a later Easter compared to a year earlier, and as consumers returned to eating out in restaurants and pubs, as the Omicron variant was in demand. Susan Barat, chief executive of IGD Research, said the prospect of rising prices had pushed consumer confidence below the levels it had last seen in December 2013, when the horsemeat scandal rocked the food industry. “These challenges affect shoppers in different ways, with household cuts seeing less affluent shoppers skipping meals to save money,” he said. “This volatile period is going to continue as the reality of rising energy prices, as well as general inflation, hits buyers.” Highlights from Barclaycard showed that consumer card spending rose 17.7% in March, largely due to rising fuel and food prices as households come under increasing pressure from the cost of living. Subscribe to the Business Email daily email or follow the Guardian Business on Twitter at @BusinessDesk Barclaycard, the UK’s largest credit card provider, which handles almost half of card transactions, said shoppers were buying in bulk to save money, while many were buying non-perishable items and household supplies. With gasoline and diesel prices hitting record highs after Russia’s invasion of Ukraine, it boosted global energy markets, saying fuel spending rose 26.1 percent. In response to the high prices, surveys on behalf of the card provider showed that 41% of people changed the way they travel, including walking and cycling more, and limit longer car trips. Jose Carvalho, head of consumer products at Barclaycard, said: “Rising fuel prices and household bills have clearly begun to influence consumer behavior, with many Britons changing their travel and shopping to save money. “While this may reduce growth in the coming months, we should not overlook the expected heatwave later in April and the Easter holidays, both of which are likely to boost non-core spending.”
