March retail growth distorted by Easter

Online sales continued to experience growth in March, but saw a slowdown compared with previous months, new figures have shown.

Non-food sales online in March also grew by 6.6 per cent, compared with March 2016.

Despite an increase, it is the slowest rate of growth since August and is behind the 12-month average of nine per cent. In the three months to March, growth was by 7.4 per cent year on year, the lowest since May 2013.

Online sales represented 22 per cent of total UK non-food sales in March, compared with 20.9 per cent in the same month a year earlier.

Meanwhile, in the bricks-and-mortar world, UK retail sales fell by one per cent on a like-for-like basis in March, compared with a 0.7 per cent fall in the previous year.

On a total basis, sales fell by 0.2 per cent in March, against flat growth in the same month last year.

Over the three months to March, non-food in-store sales in the UK declined 1.1 per cent on a like-for-like basis and 0.8 per cent on a total basis. This is the slowest three-month total average growth since May 2011.

In-store sales continued to decline over the three months to March, falling by three per cent on a total basis and 3.4 per cent on a like-for-like basis. They also showed a decline for the month of March.

Meanwhile, overall shop prices saw deflation of 0.8 per cent in March, compared with a one per cent fall in February.

Non-food deflation accelerated to two per cent in March, up from the 1.8 per cent fall in the previous month. Electricals saw price deflation of 1.7 per cent on a year ago.

British Retail Consortium chief executive Helen Dickinson (pictured) said: “Online non-food sales growth in March were dampened by the later timing of Easter this year. Those products historically popular with shoppers over the long weekend, notably larger homeware items, took a hit but will feel the benefit during April instead. Gaming and electricals continue to be online best sellers as customers are enticed with new product launches.

“Retailers continue to innovate and invest in their digital offers to attract customers amid the intense competition. Mobile optimisation has been the focus for many and some are already reaping the benefits of higher conversion rates as customers enjoy speedier browsing activity.”

Paul Martin, KPMG UK head of retail, added: “Online retail sales in March fared better than the high street, with non-food sales up 6.6 per cent in the month. That said, we haven’t seen growth this low since August last year and the timing of Easter is likely to have had an impact. Demand in UK retail is also showing signs of slowing down more broadly.

“The later timing of Easter is likely to have contributed to the sluggish furniture and homeware sales in the month. Interest in these categories will probably pick up in the coming month, with the holiday providing an opportunity for home improvements.

“It remains to be seen if the slowdown in online sales is just a temporary blip or a more significant occurrence.”