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ONS retail sales volumes up 3.3% in March

Warm weather and panic fuel buying helped push up retail sales volumes by 3.3 per cent year-on-year in March, the Office for National Statistics has said today.

Inflation helped retail sales to rise 5.7 per cent in value compared to last year according to the governmental body, while non-food stores particularly benefitted from the unseasonably warm weather with an annual increase in volumes of 4.6 per cent.

Household goods stores sales volumes rose by 2.5 per cent in March 2012 compared with March 2011. The value of sales rose by 2.0 per cent over the same period, the largest increase since a rise of 7.7 per cent in January 2011. Average prices switched to inflation of 0.1 per cent in March 2012 from average price deflation of 0.7 per cent in February 2012.

Trading volume at predominantly food stores declined 0.6 per cent compared to last year, and a significant part of overall growth was down to a 7.2 per cent increase in automotive fuel sales, but Samuel Tombs, UK Economist at Capital Economics, argues that “consumer spending remains surprisingly resilient”.

“Retail sales volumes rose by a whopping 1.8 per cent on the previous month (consensus 0.4 per cent),” Tombs said.

“Underlying growth in sales was strong. What’s more, March’s rise left sales volumes 0.8 per cent higher in the first quarter than in the fourth, suggesting that consumer spending is likely to have supported the overall economy again in the first quarter.”

Clothing and fashion sales rose 3.7 per cent annually during the month, with trading in new spring/summer lines helped by the unexpected bursts of sunshine, and 9.1 per cent of these sales were made via the internet.

Overall online sales rose 15.2 per cent during March with the average weekly value of internet sales estimated to be £484 million, up from £475 million in February.

The threat of a truck drivers strike created panic buying of petrol across the country, which did boost today’s figures, but even when automotive fuel sales are stripped out of the totals month-on-month sales still rose by a decent 1.5 per cent.

Richard Lowe, Head of Retail & Wholesale at Barclays, commented: “The tide may finally be turning for the high street, and with unemployment falling, there is certainly a feeling the stability of the past few months is here to stay.

“The mild weather, the launch of the iPad 3, and let’s not forget the panic buying at the pumps, helped boost consumer spending.

“We’re not out of the woods yet, however, inflation has yet to fall as expected, but the promise of this summer’s festivities could be just the tonic retailers need.”

Source : Jon Whiteaker – Retail Gazette

20 April 2012
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