Earlier today we had official data on UK retail sales in February and the data was much better than expected. Now we have had a survey from the CBI looking at retail sales in March, and they were better than expected too.
The survey of 116 firms, consisting of 65 retailers, showed that growth in the volumes of sales was similar to that seen in February, but is set to accelerate in the year to April.
Sales for the time of year were considered to be slightly below seasonal norms. Orders placed on suppliers fell again over the year, but are set to rise somewhat next month.
The moderate increase in headline retail sales volumes was driven by the grocery and clothing sectors. Year-on-year growth in internet sales volumes picked up to broadly in line with the long-run average. Internet sales volumes are expected to grow at broadly similar pace in the year to April.
Anna Leach, CBI Head of Economic Intelligence, said: “It’s encouraging to see that sales volumes growth is holding up and expectations have strengthened. However, retailers continue to be squeezed by rising cost pressures on the one hand, and intense competition on the other, which will limit their ability to raise prices. With household spending growth set to slow as inflation rises, retailers seem likely to remain under pressure through this year.”
However, some were altogether less upbeat. Samuel Tombs Chief UK Economist at Pantheon Macroeconomics pointed out that "the reported sales balance remained in March comfortably below its +18 average between 2013 and 2016—when consumer spending boomed—indicating that retail sales faltered in Q1."
He added: "The flat trend in households’ real incomes suggests that consumer spending will rise only at a meagre pace—perhaps of just 0.2% quarter-on-quarter—this year."