ONS figures showed a larger-than-expected fall in retail sales in March. Getty Images
ONS figures showed a larger-than-expected fall in retail sales in March. Getty Images
ONS figures showed a larger-than-expected fall in retail sales in March. Getty Images
ONS figures showed a larger-than-expected fall in retail sales in March. Getty Images

Rainy days hit UK's retail recovery


Paul Carey
  • English
  • Arabic

Britain's gloomy weather is putting a dampener on the retail sector, with shops reporting a decline in sales volumes in March as rain kept people indoors.

The Office for National Statistics said retail sales volumes fell by 0.9 per cent last month as clothing shops, department stores and garden centres all reported declines.

Economists had predicted a decrease of 0.5 per cent for the month.

It comes after retailers reported a 1.1 per cent increase in sales volumes in February, with the ONS marginally downgrading its original 1.2 per cent growth figure.

England and Wales had their wettest March since 1981, according to the Met Office. It was also the sixth-wettest March in records dating back to 1836.

Friday's figures come days after the ONS revealed inflation in the UK fell to 10.1 per cent in March, from 10.4 per cent in the previous month.

Stubbornly high prices continue to weigh on British consumers, especially in the food sector.

But there was some relief in the sales figures - volumes rose by 0.6 per cent in the three months to March, when compared with the previous three months.

Darren Morgan, director of economic statistics at the ONS, said retail sales fell sharply in March as poor weather affected almost all sectors.

“However, the broader trend is less subdued as a strong performance from retailers in January and February means the three-month picture shows positive growth for the first time since August 2021," he said.

“In the latest month, department stores, clothing shops and garden centres experienced heavy declines as significant rainfall dampened enthusiasm for shopping.

“Food store sales also slipped, with retailer feedback suggesting the increased cost of living and climbing food prices are continuing to affect consumer spending.”

A survey by analyst GfK found consumer outlook was at its highest point in 13 months. It recorded an 8 point rise in consumer confidence in April compared to last month, reaching levels not seen since Russia's invasion of Ukraine. The measure of confidence came in at -30, compared to -38 in April last year and -31 in March 2022.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

What vitamins do we know are beneficial for living in the UAE

Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.Vitamin B12: Important for nerve health and energy production, especially for vegetarians, vegans and individuals with absorption issues.Iron: Useful only when deficiency or anaemia is confirmed; helps reduce fatigue and support immunity.Omega-3 (EPA/DHA): Supports heart health and reduces inflammation, especially for those who consume little fish.

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The Sky Is Pink

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Cast: Priyanka Chopra Jonas, Farhan Akhtar, Zaira Wasim, Rohit Saraf

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Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers

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MATCH INFO

Qalandars 112-4 (10 ovs)

Banton 53 no

Northern Warriors 46 all out (9 ovs)

Kumara 3-10, Garton 3-10, Jordan 2-2, Prasanna 2-7

Qalandars win by six wickets

Updated: April 21, 2023, 7:24 AM