Analysts believe “buzz” around major events will help encourage consumers to get out of their homes and start spending this summer following a disappointing, rain-drenched start to the year.
By Daniel Binns, business reporter
Tuesday 9 April 2024 04:39, UK
Retail sales were up in March – and are expected to grow further in the coming months as warm weather and events such as Taylor Swift’s UK tour boost consumer spending, according to industry analysts.
Sports tournaments such as the Paris Olympics, along with factors such as falling energy bills, are also predicted to boost takings as shops recover from the impact of recent poor weather and high inflation on household budgets.
The forecasts come after year-on-year retail sales increased by 3.5% in March – which is above the average of 2.9% for the past 12 months, according to the British Retail Consortium (BRC) and KPMG.
The researchers said an early Easter was part of the reason for the rise, with food sales increasing by 6.8% year-on-year over the three months to March.
They also said further wet weather during the month had dampened demand for garden furniture, clothing, BBQs and DIY products.
However, Linda Ellett, from KPMG, said there were signs of “green shoots” for retailers, as economic indicators were “heading in the right direction with inflationary pressures easing” – although she warned that consumer confidence remained fragile.
BRC chief executive Helen Dickinson added: “After a difficult start to the year, retailers are hopeful that with warmer weather around the corner, consumer confidence will spring back up.”
Separate figures from Barclays, also released on Tuesday, found consumer card spending was “flat”, growing 1.9% in March – the same as the month before – largely due to a slowdown in non-essential purchasing blamed on the wet weather.
However, it found “growing stability” in housing costs, with its analysts also expressing optimism for the months ahead.
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Karen Johnson, head of retail at Barclays, said: “The wet weather has been a key factor in the slowdown in discretionary spending, as it’s meant fewer visits to the high street and to hospitality venues.
“However, in spite of this initial lull, many retailers are confident that spending will rebound in the coming months, particularly in anticipation of better weather, the energy price cap drop, an uplift in the national minimum wage, and the buzz around major events such as Taylor Swift‘s Eras Tour and the Paris 2024 Olympics.”
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Mark Arnold, head of savings & mortgages at Barclays UK, added that there were “reasons to be optimistic”.
He said: “Our data shows that housing costs are stabilising, the inflationary tide is easing, and interest rates are predicted to fall over the coming months, all of which should translate into increased consumer confidence and spending.”
Swift is playing a total of 15 UK shows this summer, starting on 7 June in Edinburgh before concluding at London’s Wembley Stadium on 20 August.
The US singer’s recent gigs in Australia were credited by officials for boosting the country’s economy.
The Australian Bureau of Statistics said Swift’s seven sold-out concerts in Sydney and Melbourne led to increased spending on clothing, merchandise, accessories and dining out in February.
