According to the Office for National Statistics, retail sales in the UK showed signs of weakness in March 2022, as consumers remained cautious and held back on their spending. Sales volumes declined by 1.4% in March, following a decrease of 0.5% in February. However, compared to the same month in 2020, sales volumes were 2.2% higher.
The decline in sales was primarily driven by a decrease in non-store retailing, with volumes dropping by 7.9% in March. The proportion of retail sales made online also decreased, reaching its lowest level since February 2020, at 26%. Despite these declines, e-sales volumes remained significantly higher, marking a 20.3% increase compared to February 2020.
When looking at non-food stores, sales volumes in this category saw a slight increase of 1.3% in March. However, the fashion sector did not contribute to this growth, with clothing stores experiencing a 0.5% drop in sales volumes. Department stores also saw a marginal decline of 0.1% compared to the previous month. On a positive note, “other non-food stores,” including second-hand goods stores, reported a monthly increase of 2.9% in sales volumes.
The data sheds light on the challenges faced by small independent retailers, who particularly struggled in March. Dr. Jackie Mulligan, an expert from the Government High Streets Task Force and founder of ShopAppy, emphasized the impact of inflation on people’s finances and its subsequent effect on sales. Victoria Jenkins, CEO of fashion retailer Unhidden, highlighted the slow sales and additional challenges faced by made-to-order brands, such as longer production times. Jenkins also stressed that Unhidden specifically targets a demographic that the fashion industry has often excluded: the disabled community.
The decrease in retail sales was not limited to the retail sector alone, as beauty products also experienced a decline. Dalia Hawley, a skincare manufacturer at Dalia Botanique, observed a significant drop in sales both online and in-store. She mentioned that customers now view her products as more of a treat rather than a regular purchase, possibly due to changing spending habits.
Overall, the weak retail sales figures in March underscore the ongoing cautiousness of consumers and the hurdles faced by small businesses. The impact of inflation, longer production times, and evolving consumer behavior all contribute to shaping the current retail landscape.
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