Warm spell helps lift retail sales

 

Panic buying of petrol and unseasonably warm weather lifted retail sales figures for March today.

Volumes rose 1.8% between February and March, the Office for National Statistics (ONS) said, which was the strongest rise for more than a year and well ahead of City expectations.

Fears of a tanker drivers' strike caused people to stock up on petrol, driving a 4.9% increase in sales at fuel stores, the highest March rise since records began in 1996.

Meanwhile, garden centres and clothes retailers were given a boost by the heatwave in the month.

The rebound in sales comes after a 0.8% decline in February and will fuel hopes that figures released next week will show the economy dodged a return to recession in the first three months of 2012.

Samuel Tombs, an economist at Capital Economics, said: "March's surge in retail sales suggests that consumer spending remains surprisingly resilient and increases the chances that the overall economy grew in the first quarter.

"Nonetheless, with wages continuing to fall in real terms, firms remaining reluctant to hire and a new wave of austerity hitting consumers in April, the foundations for a sustainable recovery in retail spending still seem to be absent."

Fuel sales, which account for some 10% of retail business, are expected to suffer in April as the panic buying brought sales forward.

Although fuel was a key driver of the rise in sales, all sectors apart from food stores enjoyed volume growth in the month. Excluding fuel, volumes were still 1.5% higher than in February.

Clothes and footwear stores saw sales volumes rise 2.3% as consumers updated their wardrobes with summer ranges, while household goods stores, which have been badly hit in recent months, enjoyed a 0.9% rise amid evidence of people buying more carpets and DIY goods.

But supermarkets saw volumes decline 0.3% as shoppers made cutbacks after average prices rose 4.4%.

Internet sales showed more strong growth, with a 1.8% rise in volumes, which means they now account for 8.5% of all sales.

Overall, the volume of sales was up 3.3% compared to the previous March, while the amount of money spent rose 5.7% to £32.6 billion, reflecting inflation.

PA

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