Biggest fall in UK retail sales in seven years

Shoppers on a high street Image copyright Getty Images Image caption Demand fell for all types of goods except for textiles, clothing and footwear

UK retail sales posted their biggest quarterly fall in seven years in March, as the prices of everyday goods continued to climb.

Sales were down 1.4% on the preceding quarter, and down 1.8% compared with February 2017, according to the Office for National Statistics (ONS).

In the quarter, sales volumes fell in all types of shop except those selling textiles, clothing and footwear.

But the total amount spent was still higher than a year ago.

'Clouds gathering'

Kate Davies, senior statistician at the ONS, said: "This is the first time we've seen a quarterly decline since 2013, and it seems to be a consequence of price increases across a whole range of sectors."

The ONS said average store prices had increased by 3.3% on the year, the highest growth since March 2012.

The largest contribution came from petrol stations, where prices were up by some 16.4% on the year.

Keith Richardson, managing director of retail at Lloyds Bank Commercial Banking, said that after record growth in 2016, the retail sector was slowing down.

"These figures suggest that the clouds are now gathering over British consumers," he said.

"Rising food and petrol prices, together with slowing real wage rises, appear to be finally prompting shoppers to tighten their belts, while the value of the pound continues to put pressure on retailers' costs."

Chris Williamson, chief business economist at IHS Markit, said the trend appeared to have continued into the second quarter.

"The latest IHS survey data showed the amount of cash that households had available to spend fell in April to the greatest extent for two and a half years," he added.

"Spending was supported by households eating further into their savings and taking on more debt [which] is clearly unsustainable in the long run".

There were some bright spots in the ONS figures, with textiles, clothing and footwear sales increasing by 6.5% year-on-year in the quarter.

Online sales also continued to rise, climbing 19.5% in the 12 months to March and up 0.5% compared with February 2017.

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