The British retail sector has experienced the biggest quarterly drop in sales since 2010, as rising prices since last summer’s Brexit vote ramp up pressure on shoppers.
Retail sales volumes have contracted 1.4 per cent in the first three months of 2017 – the biggest quarterly fall since the first three months of 2010, after a 0.8 per cent rise in the build up to Christmas 2016.
According to the Office for National Statistics (ONS), retail sales figures were likely to cut 0.1 per cent off UK economic growth overall for the first quarter of 2017.
ONS figures revealed March to be the worst month for the sector. Retail sales contracted 1.8 per cent last month, negating the 1.7 per cent increase posted in February.
These latest statistics follow the release of the British Retail Consortium’s latest sales index, which last week posted its greatest fall for six years in the first quarter in 2017, marking a huge dip in high street spending.
Commenting on the data, Woldpay chief economist Jeremy Cook said that negative retail sales figures should not come as a shock.
“The picture is one of weakness. Future surveys will show whether any political fears are hurting consumer sentiment but for now, this is a function of Brexit price rises from the weakness of the pound.”
Cook warned that low levels of consumer spending could have knock-on effects for the retail industry, with lower wages and job losses now more likely for workers in the sector.
This month, major high street retailer Marks & Spencer announced plans to close six flagship department stores in an attempt to cater to changing behaviour amongst UK shoppers.
Meanwhile, Britain’s second-largest department store chain, Debenhams, warned that hundreds of jobs could be at risk from a plan to close up to ten stores.
Cook added: “Viewed through the prism of these recent store closures, the second shoe to drop of the atmosphere of high prices and low spending has to be further wage compression and rising joblessness.
“We used to think that when the going got tough, the Brits went shopping but this retail environment is too much for the hardy British consumer.”
We want to hear your views on the challenges facing UK high street retailers, so please take two minutes to complete our High Streets Initiative survey and make a difference.
Read more from our recently launched High Streets Initiative:
- Britain’s biggest high street threats
- What makes shoppers tick? How to better understand customers
- The worst affected high streets in Britain
Sign up to our newsletter to get the latest from Business Advice.