RETAIL INFLATION-UK retail sales stagnate despite easing inflation
Despite recent high inflation lowering, British retail sales stagnated in March, the first time they have not climbed in monthly terms since December, according to the Office for National Statistics on Friday.
Economists polled by Reuters predicted that sales volumes would rise by 0.3% for the month.
However, the ONS reported that sales volumes were flat after growing by an upwardly revised 0.1% in February.
The ONS reported that increases in car gasoline sales, which were the greatest since May 2022, and non-food shop sales were offset by declines in food stores, internet and other non-store retailers.
Purchases volumes, excluding gasoline purchases, down 0.3% for the month.
“What is clear is that the first quarter of this year has been disappointing for many retailers,” said Lisa Hooker, PwC’s industry leader for consumer markets. “Lower inflation and the first 2% cut to National Insurance, which was felt in January’s pay packets, has yet to translate into a sustained recovery in spending.”
Finance Minister Jeremy Hunt, intending to bolster the Conservative Party’s chances in an upcoming election, approved a second social security tax cut in April, following the previous January drop.
Leading UK merchants have recently shown promising indicators.
Tesco (TSCO.L), the country’s largest grocery business, and clothing group Next (NXT.L), both underlined a stronger consumer outlook and predicted earnings increase in 2024. Home improvement firm Kingfisher (KGF.L) has worried about its profits, but says its UK operations are operating better than in France.
