UK retail sales experienced a modest boost in early spring, driven by improved weather and purchases for Mother’s Day.
UK Retail Sales Get a Boost from Spring Weather
The improving weather in March helped give a lift to the retail sector, with sales of gardening, DIY, food, and health and beauty products getting a boost from the spring sunshine. According to a British Retail Consortium-KPMG survey, purchases for Mother’s Day also contributed to the 1.1% increase in retail sales last month.
Weather-Related Spending Boosts Sales
Spending on gardening equipment increased by 13.4% last month, with garden centres reporting strong sales. The improving weather made for a particularly strong final week of March, with DIY equipment flying off the shelves. This surge in spending was driven by consumers taking advantage of the warmer weather to invest in their gardens and homes.
Underlying Demand Strengthens Despite Challenges
Despite a challenging global geopolitical landscape, the small increase in both food and non-food sales masked signs of underlying strengthening of demand. The survey’s findings suggest that the retail sector is starting to show signs of recovery, with consumers beginning to spend more on goods related to gardening and DIY.
Household Budgeting Under Pressure
However, households are still adopting ‘prudent budgeting’ as bills rise, including an average “almost 5%” council tax increase, food inflation on basics such as butter, and water bill increases that have risen by more than 30% in some areas. This pressure is leading consumers to prioritize their spending, with households cutting back on essentials such as groceries, petrol, and energy bills.
A well-planned household budget helps manage finances effectively.
Allocate 50-30-20: 50% for necessities, 30% for discretionary spending, and 20% for savings and debt repayment.
Track expenses using a budgeting app or spreadsheet to identify areas for improvement.
Regularly review and adjust the budget as income and expenses change.
Retailers Struggle Amidst Price War
The fight for a share of straitened household budgets is being led by Asda, which is struggling to hold on to its position as the UK’s third-largest chain. The stock market value of major supermarkets has fallen as companies prepare for a price war. Meanwhile, online retailers are winning out, with some firms experiencing significant sales growth.
Asda is a British supermarket chain founded in 1949 by two entrepreneurs, Peter Davis and Archie Norman.
Initially operating as a small market stall, the company expanded rapidly and was acquired by Kingfisher plc in 1999.
In 2010, Asda was sold to Walmart, an American multinational retail corporation.
Today, Asda operates over 630 stores across the UK, employing over 180,000 staff members.
The supermarket chain is known for its affordable prices, wide product range, and convenient services.
Experts Warn of Inflation and Investment Challenges
Experts warn that the increase in national insurance contributions for employers and new payments related to packaging recycling will “undoubtedly increase inflation later in the year and hold back critical investment in high streets across the country”. The rise in unemployment and falling job vacancies is also a concern, as it suggests that employers are becoming more reluctant about hiring.
