Squeezed households dampen demand
Responding to the latest ONS Retail Sales Index figures, which showed 4.9% year-on-year sales growth in March 2022 (value, non-seasonally adjusted retail sales excluding fuel: J3L2), Helen Dickinson, Chief Executive of the British Retail Consortium, said:
“March sales were impacted by rising concerns around inflation as consumer confidence tumbled. The cost-of-living squeeze has many consumers thinking twice about major purchases, while their expectations of future financial situation plummeted to lows not seen since the financial crisis. Consumers face even more challenges as the energy price cap rose to a record high this month. Internet sales dropped to their lowest proportion of total retail sales since the start of the pandemic as shoppers gradually returned to physical retail destinations.
“Retailers are themselves squeezed between rising costs of operations, exacerbated by the situation in Ukraine, and weaker demand from customers. Higher global commodity prices, rising energy and transport costs, and a tight labour market, are all taking their toll. As a result, it is likely that retail prices will continue rise over the course of 2022.”