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Retail sales stagnate despite easing inflation

Retail sales stagnate despite easing inflation
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UK retail sales stagnated in March representing the first time that sales have not grown in monthly terms since December, official data showed Friday.

Economists polled by Reuters had expected sales growth of 0.3 per cent in March. February has seen a modest growth of just 0.1 per cent, revised up from stagnation.


While spending on motor fuel and non-food goods rose, by 3.2 per cent and 0.5 per cent, respectively, this was offset by falls in food stores and online retailers of 0.7 per cent and 1.5 per cent, with increased prices affecting consumer spending habits, the Office for National Statistics said.

Earlier this week, ONS reported a fall in inflation in March, with the Consumer Prices Index dropping to 3.2 per cent, the lowest level since September 2021.

Looking at the quarter, sales volumes increased by 1.9 per cent in the three months to March 2024 when compared with the previous three months. This was following low sales volumes over the Christmas period for retailers.

"Retailers had a gloomier March than many expected, and overall sales remain 1.2 per cent below their pre-covid peak,” Nicholas Hyett, Investment Manager at Wealth Club, commented.

“Department stores remain an area of particular weakness, not good news for John Lewis which announced it would not be paying its regular staff bonus for the second year in a row during the month. However, high street shops more broadly have actually performed better, it's food retail and online shopping that have held back growth.

The disappointing numbers will fuel speculation that the Bank of England will consider interest rate cuts this summer, though are not poor enough to necessitate a move. It leaves the UK a little limbo once more.”

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Seven out of 10 respondents (72 per cent) said their stores had experienced shoplifting, break ins and damage to property, while they and their staff had been physically or verbally threatened.

Just under half of respondents (47 per cent) said they and their employees had been threatened or had suffered abuse and violence when asking for proof of age ahead of selling an age-restricted product.

Forty-four per cent reported that they and their staff had faced abuse or violence because they had refused to make a proxy sale – selling an age restricted product to a customer buying for a minor.

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“Inadequate responses from the police and a slap on the wrist for offenders means that shoplifting is soaring, and offenders are becoming more aggressive and brazen,” said Fed National President Mo Razzaq.

“From the responses we received, it is clear that real action is needed by police, by courts and by the government to stem the overwhelming tide of crime against retailers and their staff. Everyone deserves to feel safe at work and for their businesses to be protected against criminals.

“Fed members are also sending a clear message that one of the catalysts for verbal and physical abuse in stores is asking for proof of age before selling an age restricted product. If the government presses ahead with its plans to phase out smoking and vaping through a progressive ban to gradually end the sale of tobacco products across the country, independent retailers will be subject to even greater levels of violence, abuse and theft.”

Calling for action from the government and not just words, Mr Razzaq continued: “Without effective deterrent, criminals and opportunistic members of the public will continue to commit crimes.”

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