UK retail sales slowed in March although spending remained above last year

By Suzanne Evans, Director, Political Insight

UK retail sales slowed in March although spending remained above last year. The British Retail Consortium (BRC) and KPMG's retail sales monitor showed total sales rose 3.1% in March, worse than the three-month average growth of 3.2% and the 12-month average growth of 6.5%. Helen Dickinson OBE, CEO of BRC, said: "The rising cost-of-living and the ongoing war in Ukraine has shaken consumer confidence, with expectations of people’s personal finances over the next 12 months reaching depths not seen since the 2008 financial crisis. Furthermore, households are yet to feel the full impact of the recent rise in energy prices and national insurance changes. There is also potential for further supply chain disruption, with China putting key manufacturing and port cities into lockdown. Ultimately, consumers face an enormous challenge this year, and this is likely to be reflected in retail spend in the future".
 
UK wage growth is failing to keep up with the rising cost of living, according to Office for National Statistics figures from December to February. Although the average wage excluding bonuses rose 4% in the period, when taking rising prices into account, regular pay showed a 1% fall from a year earlier. The data also revealed a sharp contrast in pay growth between the public and private sectors. Average total pay growth for the private sector was 6.2% but just 1.9% for those in the public sector.
 
Concern about finances and the cost-of-living squeeze now worries more people than Covid. Almost four in 10 people (38%) are concerned about money and paying bills, up from 32% in January, the highest level since the start of the pandemic, researchers at University College London say. Meanwhile, 33% are still most concerned about getting Covid, down from 40%. The findings are based on a survey of 28,495 people between 21 and 27 March that was funded by the Nuffield Foundation, UK Research and Innovation, and Wellcome.
 
Introducing a priority system to help perishable goods get through long queues at Dover is not a realistic option, the environment secretary has said. George Eustice told BBC Breakfast that such a system would be difficult to stand up at short notice and on a large scale. On Sunday, hauliers warned fresh produce was losing quality and value, with some lorry drivers waiting more than 24 hours to cross into Europe. Eustice said the backlog is now starting to clear.
 
The proposed £6.3bn foreign takeover of Coventry-based Meggitt has been cleared by the European Commission, which said that the company's US buyer Parker-Hannifin had satisfied its competition requirements. Business Secretary Kwasi Kwarteng is yet to give his blessing to the deal, which has raised concerns about national security: Meggitt makes brakes used on more than 70,000 civil and military aircraft, and supplies parts for the RAF Typhoon jet fighter.
 
Heathrow Airport is under pressure to drop plans for higher landing chargesafter the airport welcomed the most travellers since the start of the pandemic, The Telegraph reports. Almost 4.2m passengers used Heathrow in March, the highest level for two years, and expectations are high that this week’s Easter schedule will hit 86% of 2019 levels at the airport. Airlines therefore argue that there is no justification for Heathrow to increase the landing fees it charges airlines – which already went up by a third in January – to cover pandemic losses. Heathrow is planning to increase them by up to 90% over the next five years but needs permission from the Civil Aviation Authority (CAA) to do so. Tim Alderslade, head of trade body Airlines UK said: “Heathrow is trying to recoup its pandemic losses off the backs of passengers by relying on overly pessimistic forecasts that suit their own agenda. They’re pulling a fast one and we need the CAA to be wise to that.”
 
easyJet says summer bookings are now exceeding pre-pandemic 2019 levels. Despite being hit by staff shortages and flight cancellations over the Easter holiday period, the low-cost airline also said this morning that it had flown 94% of its planned schedule in the last seven days "despite the recent increase in the number of crew testing positive for Covid-19". The company now expects to post a group pre-tax loss of between £535m - £565m. Passenger numbers soared to 11.5m for the three months to March 31, compared with 1.1m a year earlier.
 
Pret A Manger is branching out into the Republic of Ireland and in Northern Ireland. The sandwich chain plans to open 20 outlets over the next decade. Pret is owned by investment group JAB and founder Sinclair Beecham. It said the deal with its long-term franchise partner Carebrook Partnership will create as up to 500 jobs. The first site will open in Dublin this summer.
 
Singapore-based BOC Aviation has ordered 80 A320neo family aircraft from Airbus – which says it is “the largest single order ever placed” by the global leasing firm. The aircraft wings will be built in the UK.
 
Online fashion giant Asos says it expects to take a £14 million hit from its decision to stop selling clothes in Russia. The firm also said that although sales rose by 1% to £2 billion in the six-month period up to the end of February, it suffered a £15.8 million pre-tax loss for the period because of £30.6 million spent upgrading the business. The retailer added it is feeling the effects of supply chain disruption and limited stock availability and expects the next six months to be more challenging due to inflationary pressures.
 
Some Twitter employees are “super stressed” and “working together to help each other get through the week,” following the announcement that Tesla and SpaceX chief Elon Musk will not be joining the social media giant’s board of directors, Bloomberg reports. It has been noted that by not joining the board, Musk will not be subject to an agreement that would cap his stake in the social media giant at about 15%.

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