Shop sales have slowed down as household budgets come under pressure from the rising cost of living, new figures show.
Retail sales last month were up 3.1% compared to March 2021, the smallest increase so far this year and down from a 6.7% rise in February.
While spending in March 2022 remained above last year, the British Retail Consortium (BRC) said this likely reflects higher prices.
Inflation is rising at its fastest rate for 30 years and many consumers are having to cut back on spending as a result of higher prices for fuel, energy and food.
“The rising cost of living and the ongoing war in Ukraine has shaken consumer confidence, with expectations of people’s personal finances over the next 12 months reaching depths not seen since the 2008 financial crisis,” said Helen Dickinson, chief executive of the BRC.
“Furthermore, households are yet to feel the full impact of the recent rise in energy prices and national insurance changes. There is also potential for further supply chain disruption, with China putting key manufacturing and port cities into lockdown. Ultimately, consumers face an enormous challenge this year, and this is likely to be reflected in retail spend in the future.”
Don Williams, retail partner at KPMG, added that retailers are also facing challenges with rising costs and inflation, “and are walking a tightrope between absorbing rising costs themselves or passing these on to consumers, when competition for share of a shrinking wallet is increasingly fierce.”