March delivered a “sharp shock” to retailers as consumers reined themselves in to cover essential shopping in the face of spiralling cost-of-living pressures.
Footfall across all UK retail destinations fell by 2.8% on the month before – a significant drop from the 9.4% increase seen between January and February, according to MRI Springboard.
Meanwhile, footfall on UK high streets was down 18.7% on 2019 levels and 0.6% below last March.
MRI Springboard said inflationary pressures and interest rates had led to consumer trips now being driven by essential shopping, demonstrated by an annual decline in footfall of 1.4% across UK high streets at the weekend – the first month ever this has occurred.
“For many consumers a period of austerity has started, with the driver of trips now being essential spending rather than experience as many consumers rein in leisure-based trips to destinations to reduce their spending.”
Separate figures from accountancy and business advisory firm BDO confirm inflation and a dip in spending hit sales in March.
Total like-for-like retail sales increased by 4.1% on last March, and the fashion sector suffered a slowdown in sales growth, marking its lowest point in more than two years.
Retailers were disappointed by weak growth in online sales, with total non-store like-for-likes increasing by just 2.8% from last March’s negative base of minus 10.8%.
“This is eating into consumers’ discretionary spending and is bad news for the fashion, lifestyle and homewares sectors, as we can see in the March retail sales results.
“Consumers simply have much less money to treat themselves because of increasing prices for essentials, which is therefore taking a bigger slice of their purse and reducing their spending power on discretionary spend categories such as fashion, homewares and lifestyle products.”
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, which is part of the Warm This Winter campaign, said: “When businesses suffer from high energy prices, the public suffers too as the impact of higher running costs have to be passed on to the customers.
“The UK Government’s failure to fix Britain’s broken energy system has left businesses in trouble and the trickle down impact of this will be reduced consumer spending on our high streets as even more money ends up in the hands of multimillion pound profit-making energy firms.”
