Spring Budget 2024: retail insiders urge government to stimulate economy  

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Retail was hit by the wettest February on record, reveal the latest figures from the British Retail Consortium. Its Retail Sales Monitor reveals total UK retail sales increased by 1.1 per cent year-on-year in February, against a growth of 5.2 per cent in February 2023. This was below the three-month average growth of 1.4 per cent and below the 12-month average growth of 3.1 per cent.

Food sales rose by 6 per cent YoY over the three months to February, but growth was slower compared to the previous year. Non-food sales including fashion and homewares decreased by 2.5 per cent against a growth of 3.2 per cent in February 2023. This was echoed online, with non-food related e-commerce sales dipping by 4.1 per cent.

“Consumer demand was dampened by the wettest February on record, translating into a poor month of retail sales growth,” comments Helen Dickinson OBE, chief executive of the British Retail Consortium. “Not even Valentine’s Day lifted customers out of the gloom, and gifting products that typically sell well, like jewellery and watches, failed to deliver. On the sunnier side, rainy weather did brighten sales of toys, as parents looked for ways to occupy their children indoors.

“With consumer confidence and demand remaining weak, government must find ways to stimulate the economy. Retailers have some government induced cost hurdles to jump in the coming months including a £400m business rates rise based on last September’s 6.7 per cent inflation rate. By using Wednesday’s Budget to reduce this, the chancellor will lend a helping hand to much needed investment in businesses and local communities up and down the country.”

Meanwhile, Helen Brocklebank, CEO of Walpole, the official sector body for UK luxury, says the data strengthens the case for Jeremy Hunt to use this week’s Spring Budget to reintroduce VAT-free shopping. “Scrapping the ‘tourist tax’ will help boost spending among visitors from across the globe, while helping to support regional manufacturing, hospitality and retail jobs throughout the UK,” she says. “Our calls are not happening in a silo – in fact a 64-strong group or MPs and peers recently pledged its support, alongside hundreds of businesses.

“As central banks start to loosen monetary policy, with the UK being one of many economies preparing for a ‘soft landing,’ boosting consumer purchasing power is vital in assisting the UK retail sector to reach long-term prosperity and helping to pave the way for economic growth. Such a move would provide a massive boost to the UK’s luxury sector, which already contributes over £48bn to the economy each year and supports 156,000 jobs across the regions.”