Retailers post sales ahead of expectations

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The Independent Online

Underlying retail sales fell for the ninth month out of ten in March, but the figures were better than expected as hefty discounting and sunny weather set the tills of clothing and shoe retailers ringing.

The British Retail Consortium-KPMG sales monitor revealed that retailers' like-for-like sales declined by 1.2 per cent in March, but this was an improvement on February's 1.8 per cent fall in underlying sales. Total retail sales inched up by 0.6 per cent in March, year on year, compared with growth of just 0.1 per cent in February.

But industry experts cautioned against reading too much into last month's data, as in March 2008 retailers were boosted by the Easter weekend but were hit by cold and snowy weather in the same month.

Helen Dickinson, the head of retail at KPMG, said: "While 0.6 per cent growth in the value of the total retail sales is nothing to write home about, it is better than expected given that we still have the anticipated uplift due to Easter trading to come in April."

Last month, clothing retailers posted their first sales increase since last May, boosted by the warm weather and hefty discounting. Footwear retailers enjoyed their best sales since May 2008, driven by strong sales of women's shoes. But furniture and floor-covering retailers suffered more than a 10 per cent fall in sales – the largest year-on-year decline for at least nine years.

Stephen Robertson, the director general of the BRC, said: "This is unlikely to be the basis of sustained improvement. Customers are still worried about jobs and their own finances – so they're keeping spending under tight control." Like-for-like food sales rose by 4.7 per cent, but non-food tumbled by 4.3 per cent in March.

Despite the better-than-expected sales, more retail failures are expected over the coming months. Robin Knight, a partner at the restructuring specialist Zolfo Cooper, said: "We do not think that consumer confidence has reached the bottom yet, and that will drive restructuring activity."

In March, internet, mail order and phone sales grew by 10.8 per cent, but this was lower than the non-store sales growth of 12.3 per cent in February, the BRC said.