Retail sales ground to a halt last month as shoppers turned their backs on department stores due to rising prices.
But the flat performance comes after a more impressive start to the year, meaning the sector should still help lift the UK out of recession.
The Office for National Statistics (ONS) said retail sales volumes in March were unchanged from the previous month.
High Street department stores such as John Lewis were the biggest losers, with sales falling 3.8 per cent.
Stores reported that “higher prices hit trade,” ONS senior statistician Heather Bovill said.
Hope: The flat performance follows a more impressive start to the year, meaning the sector should still help lift the UK out of recession.
Food stores also saw a drop in sales, although it was a better month for the High Street, where an increase in footfall helped clothing and furniture retailers record growth. The stagnant performance of retail sales fell short of the 0.3 percent growth forecast by economists.
This follows growth of 3.7 percent in January and 0.1 percent in February.
Lisa Hooker, industry leader for consumer markets at accounting giant PwC, said: ‘What is clear is that the first quarter of the year has been disappointing for many retailers.
“Lower inflation and the first 2 per cent cut to National Insurance that was felt in January pay packages have not yet translated into a sustained recovery in spending.” However, during the first three months of 2024, sales were still up 1.9 percent from the previous quarter. That should help the broader economy emerge from the recession late last year, when GDP contracted for two quarters in a row.
It is only the second quarterly expansion in retail sales volume since the beginning of 2022, a period during which consumers have experienced a painful reduction in the cost of living.
“Green shoots have started to appear for retailers,” said Ellie Henderson, an economist at wealth manager Investec.
Alex Kerr, of analysts at Capital Economics, said: “Although retail sales volumes that remained unchanged in March were worse than expected, sales volumes in the first quarter [first quarter] continued to rise overall, ending the retail recession. And as inflation falls, we continue to think that rising real household incomes will support retail activity throughout 2024.”
Separate figures this week showed inflation fell to 3.2 per cent in March, its lowest level in two and a half years, which Chancellor Jeremy Hunt said should make people “start to feel the difference” .
A Deloitte survey yesterday showed that consumer confidence is at its highest level since the third quarter of 2021.
Falling inflation brings relief to millions of households after a painful period in which it hit a four-decade high of 11.1 percent amid skyrocketing energy and food prices. It is expected to return to the Bank of England’s 2 percent target this spring, resulting in interest rate cuts.