UK retail sales experienced a significant surge in the first quarter of the year, marking the fastest pace of growth in nearly four years. According to the Office for National Statistics, sales volumes between January and March increased by 1.6% compared to the previous three months, representing the largest rise since July 2021. The boost in sales was attributed to the warmer weather in March, which particularly benefited garden centers, clothing, and DIY goods. However, food sales volumes saw a decline during this period, especially in supermarkets.
In March alone, sales volumes witnessed a 0.4% increase, defying analysts’ expectations of a 0.4% decline. The ONS reported strong trading at garden centers due to the sunny weather last month. While non-food stores experienced a 1.7% rise in sales, this growth was partially offset by a 1.3% decrease in food store sales volumes. Despite the positive performance in March, concerns were raised about the future trajectory of sales, following a sharp drop in consumer confidence in April.
Market research firm GfK revealed that consumer confidence plummeted in April to its lowest level since November 2023. Factors such as increasing bills and a pessimistic outlook on the economy contributed to this decline in confidence. Neil Bellamy, consumer insights director at GfK, highlighted the impact of rising costs and concerns over inflation on consumer sentiment. UK economist Alex Kerr from Capital Economics expressed caution about the sustainability of March’s sales growth, suggesting that the drop in consumer confidence could lead to more cautious spending behavior in the coming months
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