Home » UK Business News » Wet weather dampened UK retail sales in the past two months

Wet weather dampened UK retail sales in the past two months

By Nithya Bose in UK Business News, posted April 22, 2023

Retailers had a tough time in February and March as heavy rainfall dropped sales by 0.9 percent.

Department and apparel stores were the worst hit, with food retailers reporting a 0.7 percent sales decline due to product shortages.

Due to terrible weather in Spain and North Africa, fresh produce like tomatoes and cucumbers was in limited supply.

The Office for National Statistics (ONS) said, "26 percent of adults experienced shortages of essential food items that were needed on a regular basis" during March.

The food purchased last month was 3 percent below pre-pandemic levels in February 2020, which merchants blamed on rising costs of living and price hikes.

Despite the March sales slump, the ONS reported that sales rose by 0.6 percent in the first three months of the year compared to the previous three months.

It was the first quarterly sales rise since August 2021.

In March, inflation reached 10.1 percent, owing primarily to rising food prices.

But according to the British Retail Consortium (BRC), a decline in food production costs, which peaked in October last year, is still not reflected in groceries.

The BRC said it requires three to nine months for falling prices to reach stores, but it expects food prices to fall "over the next few months."

Rising food costs have a wide-ranging impact on society.

Separate ONS data reveal that 96 percent of those surveyed attributed bumped food prices to the higher cost of living they had experienced in the previous month.

As a result, many people said they were limiting non-essential spending, like on fashion, while over half said they were shopping around more.

42 percent of respondents said they spent less on food and other necessities.

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Capital Economics analysts said the increase in quarterly sales indicated: "the 18-month retail 'recession' may have come to an end.

“Indeed, the more seasonable weather in April may support a rebound in sales this month."

However, it warned that a further hike in interest rates when the Bank of England meets in May might dampen sales, placing more pressure on consumer spending.

To tackle stubbornly high inflation, the Bank has raised borrowing costs, which now stand at 4.25 percent.

Source: BBC

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