Recovery is on course with strong retail sales in March

Retail sales rocketed last month as consumers prepared for a partial lifting of coronavirus lockdown restrictions, according to official data.

Sales volumes leapt by 5.4 per cent in March from February, the Office for National Statistics said, with clothing stores benefiting especially.

Sales had also risen in February after slumping in January on the back of England’s third round of virus curbs.

British consumer sentiment rose to its highest since the start of the Covid-19 pandemic this month as the economy reopened partially, a closely watched survey showed on Friday, but the increase was smaller than economists had expected.

The GfK Consumer Confidence Index increased to -15 in April from -16 in March, its highest since a survey conducted in early March last year, before the country went into lockdown.

“We think this data represents further evidence of a return to normality as UK lockdown restrictions are eased, a process that we expect to have accelerated in April, as non-essential retail outlets were allowed to open (though we note that today’s GfK consumer confidence data implied a smaller than expected gain in sentiment to -15 in April from -16 in March),” said Paul Jackson, Global Head of Asset Allocation Research at Invesco, commenting on the retail sales figure.

The government is targeting a phased reopening on the back of a successful vaccine drive, with non-essential retailers reopening for business last week.

The ONS added that overall sales are currently 1.6 percent higher than their pre-pandemic level in February 2020.

Food stores reported monthly growth of 2.5 per cent in March, with strong growth in specialist food stores such as butchers and bakers, likely reflecting the continued closure of the hospitality sector during the Easter period.

The proportion spent online decreased to 34.7 per cent in March, down from 36.2 per cent in February. However, this is still above the 23.1 per cent reported in March 2020. While the value of online spending did increase in March, spending in-store increased at a faster rate.

Retail sales for the quarter remained in the red, falling by 5.8 per cent when compared with the previous three months, with strong declines in both clothing stores and other non-food stores as a result of the tighter lockdown restrictions in place.