Warm spell helped lift retail sales

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

Volumes rose 1.8 per cent 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 per cent increase in sales at fuel stores, the highest March rise since records began in 1996.

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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 per cent 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.”

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Fuel sales, which account for some 10 per cent 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 pe cent higher than in February.

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

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

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

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