Retail sales jump as motorists stock up on fuel
Retailers saw a much-needed sales boost in the last month as Brits rushed to stock up on fuel amid fears that the Iran war could choke global supplies.
Total retail sales were up 0.7 per cent in March, compared to a 0.6 fall in February, as fuel sales rose sharply by more than six per cent, according to the Office for National Statistics (ONS).
Retailers have been warning they are at risk from soaring supply chain and energy costs caused by the conflict in the Middle East, and wet weather at the start of the year added to the high street’s woes.
“Fuel sales rose sharply in the month, with retailers reporting that motorists stocked up on fuel as prices rose,” the ONS said.
The blockage to the Strait of Hormuz, a shipping passage which accounts for a fifth of the world’s oil supplies, has sent fuel prices soaring.
Fuel prices falling but remain high
Petrol and diesel prices rose for 46 consecutive days in the UK and, though they have now begun to fall, Brits remain wary due to the fragile state of the ceasefire in the Middle East.
Diesel prices have risen by more than 47p since the start of the conflict, while petrol prices jumped by 25p, according to the RAC.
Excluding fuel, retail sales grew by just 0.2 per cent in March.
Clothing sales jumped last month due to the improving weather, as the sale of computers, art and cosmetics also drove the boost for retailers.
The March boost took headline retail sales for the first quarter to up 1.6 per cent on the previous three months.
Sandra Prince, head of consumer at Lloyds, said: ““Retail sales improved in March, with spending being supported by seasonal and cultural events in the retail calendar.
“However, consumers are increasingly prioritising essential items and taking a more considered approach to discretionary purchases.”
Retailers hope to survive until ‘golden quarter’
Justin Parr, chief credit officer at trade finance provider Treyd, said insolvencies are increasing and retailers are braced for two more “fallow” quarters before the all important “golden quarter” arrives in the lead up to Christmas.
The British Retail Consortium (BRC), the trade body representing retailers, called on the government to pull back on energy policy costs and food regulations to ease the burden on businesses.
Harvir Dhillon, an economist at the BRC, said: “Ongoing geopolitical volatility has dragged down consumer confidence, which is now at a record low.
“And while higher inflation may deliver the sugar high of greater sales values, volumes are likely to drop as the cost of living squeeze gets worse.”
Retail sales saw an Easter jump last month, as seasonal spending provided a much-needed boost for retailers.
The prospect of grounded flights and soaring food inflation were key drivers behind consumer confidence falling to its lowest level in two years on Thursday.
The first two months of the year were gloomy for retailers, with unusually wet weather driving shoppers off of the streets.