18 Apr 2019
Posted in Press Release
UK retail spending falls in March as consumers cut back on non-essential purchases, says GlobalData
2019 continues to be a challenging year for retailers as the total retail spend index declined in March, falling 3.6ppts versus February, dropping to levels seen in the summer of 2018 when consumers were distracted by warm weather and sporting events, according to GlobalData, a leading data and analytics company. Retail spending continues to be affected by poor consumer confidence, with continued Brexit uncertainty being the main culprit.
The company’s latest report ‘Retail Trend Tracker: UK Consumer Spend – March’ reveals that the late falling of Easter has likely dampened retail spending in March, as consumers have been able to wait until April to purchase food and gifts for the occasion. While retailers have been selling chocolate eggs for months, many have been discounted to encourage consumers to purchase and spread their Easter spend in the lead-up to the occasion.
Emily Salter, Retail Analyst for GlobalData commented: “Physical stores held up better than the online channel in March, bolstered by consumers purchasing items for Mother’s Day in stores due to shoppers making last minute purchases and the nature of the main products bought, especially flowers and chocolates.”
Increased spend across both clothing and footwear was driven primarily by replacement purchases. The warm weather in February meant that consumers would have brought forward new season spending, diluting demand in March – despite retailers’ best efforts to persuade shoppers with mid-season discounts. Financial uncertainty has led consumers to cut back spending on unnecessary items, affecting spend across a number of other sectors including electricals and homewares.
Salter concludes: “Looking ahead, consumer sentiment remains highly negative despite a slight rise in March, versus February. The potential extension of the Brexit deadline to 31st October 2019 is likely to constrain consumer spending on non-essential goods throughout the period, in particular due to concerns surrounding inflation. In the short term, the school Easter holidays will drive footfall to stores in April, but the good weather predicted over the Easter weekend is likely to provide more of a boost to leisure rather than retail spending.”
‘*’ The survey data is taken from GlobalData Retail’s 2018 and 2019 monthly surveys of 2,000 respondents. The total retail spend index is calculated by summing the monthly spend for all UK consumers surveyed (July 2018 = 100).