High street spending gets ‘much-needed boost’ but cost alert sent to shoppers
High street spending in March remained robust though travel companies suffered from holidaymakers’ fears about organising a trip to the Middle East, research has suggested.
Retail surveys have suggested that high street shops were boosted by shoppers’ Easter hunt for food, computers and toys last month.
Research by the British Retail Consortium (BRC) suggested that total retail sales increased by 3.6 per cent on the year and 1.1 per cent over March.
It showed that growth in sales was higher than annual averages recorded by the industry group.
Food sales were particularly high as they jumped by 6.8 per cent in the year to March while non-food sales were only slightly above a long-term average.
Data also suggested that demand was “robust” for computers, toys and homeware products, though clothing and footwear struggled.
Separate data by Barclays suggested that growth in consumer card spending was 0.9 per cent on the year, with spending on essential goods and services also returning to positive territory for the first time since last July.
The rise in spending for essential goods was primarily driven by a rise in fuel prices.
Spending outlook ‘uncertain’
Barclays’ latest report found that travel spending declined by 3.3 per cent because “trips abroad were swapped for UK staycations”.
Travel agencies, airlines and public transport all suffered from the fall in appetite for international travel.
Researchers at the bank said multiple people reported cancelling their intended travel plans.
Surveys by both the BRC and Barclays showed that consumer confidence dropped on the month due to fears about the impact of the war in Iran.
While BRC chief executive Helen Dickinson said the early Easter date this year provided “a much-needed boost” for supermarkets and other businesses, she warned that costs for shoppers could rise over the coming months.
“Retailers hope that the Middle East ceasefire will bring lasting stability, but the outlook remains uncertain,” Dickinson said.
“Damage to supply chains has already been done, and rising costs – from shipping and fertiliser to insurance and commodities – are piling yet more pressure onto already stretched retailers.”
Barclays’ head of retail Karen Johnson suggested there were “some differences” in how people felt about cost of living pressures versus how they spend on a day-to-bay basis.
“Cost-of-living concerns and economic uncertainty continue to weigh on confidence, prompting caution and a desire to cut back, but spending remains resilient across several categories, namely clothing, entertainment and digital content & subscriptions,” Johnson said.
“Many are once again carefully managing their money while finding ways to prioritise the things that matter the most to them – an ongoing balancing act.”