Retail sales remained flat in March – what does it mean for your money?

Figures out this morning from the Office of National Statistics (ONS) show retail sales volumes – the quantity that people bought – remained flat in March.

The disappointing figures follow a 0.1% increase in February.

Sales in March were mixed, with the sales of food and non-store retailers falling by 0.7% and 1.5% respectively. The drops were boosted, however, by increased volumes in non-food stores (3.2%), and automotive fuel (0.5%).  

The first three months of the year saw a slight rise in sales volumes, up 1.9%, compared with the last quarter of 2023, which saw figures impacted by low consumer spending during the Christmas period.

Heather Bovill from the ONS said: “Retail sales registered no growth in March.

“Hardware stores, furniture shops, petrol stations, and clothing stores all reported a rise in sales.

“However, these gains were offset by falling food sales and in department stores where retailers say higher prices hit trading.  

“Looking at the longer-term picture across the latest three months retail sales increased after a poor Christmas.”

How do retail sales affect the economy?

Increasing retail sales demonstrates a healthy and growing economy. Decreasing retail sales shows the opposite – consumers don’t have spare cash to spend.

How do retail sales affect your money?

Falling or flat retail sales mean that fewer people are spending. Less sales could mean that the government’s plan to cool inflation is working.

If inflation continues to fall, the Bank of England will be more willing to drop interest rates. This is good news for homeowners who have seen 14 interest rate hikes since December 2021, with interest rising from an all-time low of 0.1% to 5.25%.

Lower interest rates are less good for savers, as they’ll be paid less interest.

Falling interest rates mean it's cheaper for households to borrow, but means it’s less rewarding to save.