The volume of retail sales in the UK dropped by 1.4% in March which is the second consecutive monthly decline with the blame placed on rising inflation.

The official figures from the Office of National Statistics (ONS) stated that the February forecasted figure was revised down from a fall of 0.3% to 0.5%. However, the 1.4% figure remains 2.2% above its pre-pandemic level.

The ONS stated that the consecutive drops are likely to be the first signs of the effect of high inflation, with spending on food dropping by 1.1% in March, having fallen each month since November 2021.

The ONS stated that this also may be due to higher spending in pubs and restaurants since the removal of Covid-19 restrictions as well as rising food prices.

Supermarkets reported a fall of 0.9% in sales over the month, alongside falls in specialist food stores such as butchers and bakers of 0.7% and alcohol and tobacco, which fell by 11.3%.

According to the ONS figures 87% of adults reported that their cost of living had increased over the last month which is up from 62% in November 2021. The most common reason for the increase was cited as the price of food shopping with 88% of adults stating this.

The proportion of online sales fell to 26% in March 2022 which is the lowest since WHAT but still 4% higher than February 2020 which recorded 22.7%. The ONS stated that this continues the ‘broad downward trend’ since the February 2021 peak of 37.1%.

With prices for petrol and diesel hitting a record high last month, fuel sales across the UK fell 3.8% in March as households cut back on non-essential travel.

However, non-food stores as a whole saw a monthly rise of 1.3% and is 2% above their pre-pandemic levels of February 2020, driven by DIY stores, which saw spending increase by 4.9%, and furniture and lighting stores with a 4.7% increase.

Clothing sales fell 0.5% despite people returning to the office and department stores reported a monthly fall of 0.1% in their sale volumes.

Lisa Hooker, consumer markets leader, PwC stated that due to the current cost of living crisis and with inflation hitting 7% the declining figures reported by the ONS were ‘not surprising’.

Hooker said: ‘March saw another gradual improvement to footfall levels across the UK. As the first full month without Covid-19 restrictions in England and Northern Ireland, consumers returned to stores helped by some spring sunshine.

‘Whilst we believe there will continue to be pent up demand for certain categories as we plan for summer and a return to holidays, the squeeze on incomes will impact spending. We are already seeing consumers adopt coping mechanisms to deal with the squeeze in incomes such as seeking value and trading down. 

‘Given the latest view that inflation will stay high across the year and into 2023, we do expect further tightening of belts and have fears some of the recovery in sectors such as fashion, health and beauty, and sport and outdoors may falter in coming weeks with retailers having to work hard to win consumers’ share of wallet.’