Source: Sharecast
Total like-for-like sales in discretionary spend categories increased 1.8% year-on-year in March, after sinking by 2.2% in March 2024, according to the latest BDO High Street Sales Tracker.
However, with growth firmly behind the rate of inflation, actual sales volumes were lower than the same month last year.
In-store sales rose by just 0.3% on a LFL basis, with lifestyle and homewares sectors performing poorly with in-store sales declines of 0.7% and 2.8% respectively.
BDO said that weak in-store spending reflected the "broadly negative economic sentiment among consumers", with households having to contend with higher utility bills and council tax increases from April.
At the same time, online sales rose by 6.1% year-on-year.
“It’s no surprise that consumers might be reluctant to spend in discretionary categories when there is so much uncertainty around, including reported potential job cuts from employers struggling to bear the cost of National Insurance changes, personal household bills increasing and now the impact of trade tariffs on the economy," said BDO's head of retail and wholesale, Sophie Michael.
“As reduced consumer spending squeezes their revenues, retailers are also facing higher cost bases, with changes to National Insurance, increases to the National Living Wage and higher business rates coming this month."