More people entertaining at home as cost of living bites

Sales of home accessories and furniture rose sharply in March, as people ate out less to save money and entertained at home instead, new figures suggest.

The British Retail Consortium (BRC) said this helped total retail sales increase by 5.1% last month compared with a year earlier.

It comes as the cost of living remains high, putting pressure on households.

Inflation - the rate at which prices are rising - rose 10.4% in the year to February.

According to the BRC, Mother's Day "brightened up" sales in March, with people buying jewellery, flowers and fragrances.

But the wettest March in over 40 years held back demand for fashion items, as well as gardening and DIY products.

Sales of home accessories and furniture jumped during the month, however, seeing the strongest growth of any category, according to the BRC and accountancy firm KPMG.

Paul Martin, UK head of retail at KPMG, said people were choosing to entertain at home to cut costs. He added that the trend was likely to continue in April as council tax, mobile and utility bills rose and personal tax allowances were frozen.

"We will see consumers having to further cut back on discretionary spending," he said. "Consumers will continue to take steps to reduce spend where they can - switching where they shop, what they buy, and spending on fewer items."

Meanwhile, retail research firm IGD said that as food prices continued to rise, grocers would look for other ways to satisfy customers.

"They are striving to deliver value with loyalty schemes, quality private label products and meal solutions that enable consumers to recreate restaurant experiences at home," said boss Susan Barrett.

Despite the challenges, the BRC said consumer confidence was "edging up", while big events such as the King's coronation in May were likely to boost retailers.

However, boss Helen Dickinson warned that businesses continue to face "extensive" cost pressures such as rising wholesale costs and wages.

"Unless these future costs are brought to a heel, we will likely see high inflation continue for UK consumers who already face rising household bills from this month," she said.

The Bank of England predicts inflation will fall sharply later this year as food and energy costs come down. However, governor Andrew Bailey warned businesses not to put up prices too sharply after a surprise jump in the UK inflation rate.