Cost-of-living crisis has ‘crushed’ consumer confidence and halted retail recovery

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Retail sales have been battered as the spiralling cost of living has “crushed consumer confidence” and reversed the green shoots of retail’s post-Covid recovery.

For the month of April, total sales slipped 0.3% year on year compared with a 51.1% increase in April 2021, when ‘non-essential’ retail was allowed to reopen following Covid-19 lockdowns, according to the latest BRC-KPMG Retail Sales Monitor.

Like-for-like sales decreased 1.7% for the period, compared with a 39.6% increase for the same period in 2021. Over the three months to April, food sales decreased 1.8% on a like-for-like basis and 1.3% on a total basis.

Over the three months to April, food sales decreased 1.8% on a like-for-like basis and 1.3% on a total basis. This figure was below the 12-month total average growth of 0.7%. For the period, food was in growth year on year.

Non-food sales for the period increased by 1.8% on a like-for-like basis and 6.9% on a total basis. This was below the 12-month total average growth of 11.1%. For the month of April, non-food was in decline year on year.

The non-food online penetration rate decreased to 38.6% in April from 45.1% in April 2021. However, this was up 15.2 percentage points on the 29.9% seen at the same point in 2019.

British Retail Consortium chief executive Helen Dickinson said: “The rising cost of living has crushed consumer confidence and put the brakes on consumer spending. Sales growth has been slowing since January, though the real extent of this decline has been masked by rising inflation.

“Big-ticket items have been hit hardest as consumers reined in spending on furniture, electricals and other homeware, compounded by delays on goods coming from China. Meanwhile, thanks to the April sunshine, garden goods and fashion saw stronger sales, particularly occasionwear as consumers prepared for summer and this year’s wedding season.

“Customers face a difficult year, with the Bank of England predicting inflation to reach more than 10%. Retailers are experiencing higher costs as a result of rising commodity prices, transport costs, labour shortages, delays at ports and the war in Ukraine.

“Further headwinds are incoming, such as rising global food prices, which rose 13% between March and April. Retailers will continue to do all they can to mitigate the effects of these costs rises but, unfortunately, they cannot absorb them all.”