The onset of spring has brought gloomy news for retailers and restaurants, with consumer spending remaining subdued amidst a backdrop of cold, wet weather and economic uncertainties.
Figures from the British Retail Consortium (BRC) and KPMG reveal that sales in March and April were virtually unchanged compared to the same period last year, despite ongoing inflationary pressures, indicating a decline in the volume of goods sold during the crucial Easter season.
The four-week period ending in April saw a 4% decrease in sales, attributed in part to the early timing of Easter this year. Non-food sales bore the brunt of the decline, experiencing a nearly 3% drop, both in physical stores and online. Helen Dickinson, CEO of the BRC, highlighted the impact of dismal weather on categories such as clothing, footwear, DIY, and garden furniture, despite retailers’ efforts to entice shoppers with discounts.
Poor weather conditions also contributed to a more than 7% decrease in footfall at retail destinations in April, exacerbating the challenges faced by retailers. Dickinson remains cautiously optimistic, suggesting that consumer confidence may improve with potential interest rate cuts and the prospect of brighter summer sales as social activities resume.
Meanwhile, a Barclays consumer spend report underscores shifting spending patterns, with consumers prioritising travel and leisure activities over non-essential purchases like clothing. Spending on airlines saw a nearly 10% increase, while clothing sales experienced a decline of 1.8%. Restaurants continued to struggle, recording a 12.6% decrease in sales, similar to February’s figures.
Mark Arnold of Barclays UK noted that discretionary spending has been impacted by last year’s housing cost surge, prompting individuals to cut back on non-essential expenses. Karen Johnson, head of retail at Barclays, expressed retailers’ hopes for a rebound in spending, citing anticipated improvements in weather, the drop in the energy price cap, and upcoming events like Taylor Swift’s tour and the Paris 2024 Olympics.
Despite these challenges, retailers remain cautiously optimistic about the potential for a recovery in consumer spending in the coming months, buoyed by positive economic indicators and the prospect of improved weather conditions.
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Wet Weather and Economic Caution Dampen Spring Retail and Restaurant Sales