Retail sales in March failed to offset inflation for the sixth month since last July, according to data from BDO.
The business advisory firm’s high-street tracker said total like-for-like sales in the four weeks to 26 March grew by 4.1% compared to the same period last year.
In comparison, sales last March grew by 60.9%, albeit this was against Covid comparatives of 2021.
Store sales were up 6.6% like for like, while non-store sales grew by 2.8%.
Despite sales in positive territory, they once again failed to offset inflation, which increased surprisingly to 10.4% in the twelve months to February, up from 10.1% in January.
BDO said this will put further pressure on the profit margins of retailers.
While the Spring Budget provided some measures to support households and businesses through the cost-of-living crisis, consumer confidence remains at low levels.
“Retailers are being squeezed on two fronts: consumer spending is falling, while they’re having to increase prices on their own products. All this adds up to lower sales volumes,” said Sophie Michael, head of retail and wholesale at BDO.
In terms of sectors, fashion was the hardest hit, with like-for-like sales only up 0.7% in March.
Growth in fashion slowed from February and marked the lowest rate of growth in over two years.
Shares in Next were up however, shrugging off the gloomy outlook, trading 1% higher to 6,416p.
The same, however, cannot be said for JD Sports, which shed 1.6% to 164p.
Lifestyle sales were up 9.7% in March compared to 12 months ago, while homeware sales grew by 5.4%.