Surprise growth in retail sales

Retail sales volumes grew by 0.2 per cent month-on-month in March, the Office for National Statistics (ONS) said, against City expectations of a 0.5 per cent decline.

Department stores increased 1.4 per cent month-on-month, the ONS said, while the launch of Apple’s iPad 2 and the Nintendo 3DS helped lift sales at computer and telecoms stores.

While food stores reported a 0.7 per cent month-on-month increase in sales volumes, they saw a 0.1 per cent annual decline, as rising food prices are forcing consumers to be more cautious with their spending.

Economists had expected sales volumes to decline in March following a raft of disappointing company updates and dismal surveys from the likes of the British Retail Consortium (BRC).

Entertainment group HMV, Currys owner Dixons Retail and children’s clothing retailer Mothercare all issued profits warnings in March, while wine merchant Oddbins entered administration.

The BRC added to the gloom when its most recent survey revealed that total retail sales were down 1.9 per cent in March – the biggest decline since the start of the trade body’s monthly survey in 1995.

The latest figure will come as a surprise to some economists who had feared worse.