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The Markets
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The Markets
by Proactive
Proactive UK has moved.
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Retail

UK retail sales show underlying strength of demand

UK retail sales in March grew at the same growth rate as the month before, with the sector aided by the month seeing the sunniest weather since records began over a hundred years ago.

Total retail sales increased 1.1% year-on-year, according to data from the British Retail Consortium, which compared to a three-month average of 1.6% and a 12-month average of 0.6%.

March last year saw growth of 3.5% but was boosted by Easter, which is in April this year.

Earlier data from the BRC showed that prices have been falling, with its shop price index down 0.4% in March, the eighth year-on-year drop in a row.

Food sales increased 1.6%, below the three-month average of 2.3%, while non-food sales increased 0.6%, against three-month average growth of 1.1% and a 12-month average decline of 0.8%.

“Despite a challenging global geopolitical landscape," said BRC chief executive Helen Dickinson, "the small increase in both food and non-food sales masked signs of underlying strengthening of demand".

She said better weather made for a "particularly strong" final week of March, with gardening and DIY equipment "flying off the shelves".

"Jewellery and beauty products were helped by Mother’s Day, though sales of bigger ticket items like furniture remained weak."

IGD, which carried out the survey, said its measure of shopper confidence fell from +4 to -2 in March after a brief boost in February, citing rising geopolitical uncertainty and the imminent increases in household bills.

Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said: "There was little sign of pre-Spring Statement worries or the threat of a global trade war curbing consumer spending in March, as the BRC survey once more points to healthy year-over-year gains in the ONS’ official measure of retail sales for the same month."

The official data will be released on April 25.

He said the sunniest March since records began and half the usual amount of rainfall "did little to boost footfall however," as the BRC-Sensormatic measure of retail traffic fell by 5.4% year-over-year.

"Growth in sales volumes also remains strong because shop prices are continuing to fall," he added. "The bigger picture coming into the trade war is that consumption growth remains robust, powered by repaired household finances, healthy real wage growth, and a robust labour market. But President Trump’s trade war has upended the global trading environment and spooked financial markets."

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