The UK retail sector continued to recover last month, even before non-essential retailers were allowed to reopen their doors.
Office for National Statistics (ONS) data shows overall sales volumes in March increased by 5.4% when compared with the previous month, buoyed by sales of clothing online as consumers got ready to venture out when lockdown ended. The figure was also lifted by a rise in purchases of mobility equipment as older people left their homes after their vaccinations, a jump in sales at garden centres ahead of Spring, and increased petrol demand as travel restrictions started to ease.
The ONS highlighted that sales were up 1.6% from February last year, before the pandemic hit, despite most bricks & mortar shops not being allowed to reopen until 12 April.
“March’s strong rise in retail sales showed that the economy made a fair bit of progress even before non-essential retailers re-opened in April,” said Paul Dales, an economist with Capital Economics.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, highlighted that retailers had benefitted “immediately from the rebound in consumers’ confidence in March”.
He also pointed out that food stores may have profited from the hospitality sector still being closed during the reporting period, which ran until one day before Easter Sunday. Food retailers saw a sales uplift of 2.5% in March, with specialist shops like butchers and bakers seeing strong trade as consumers bought goods to celebrate at home.
Lynda Petherick, head of retail at Accenture UK & Ireland, added: “After a year of what’s felt like endless lockdowns, there is now a palpable sense of excitement among retailers and shoppers alike.”
Separate data released today showed that consumer confidence edged up in April as people looked forward to an improving economy in the months ahead.
GfK’s Consumer Confidence Index rose by 1 point to -15, with two measures up in comparison to the March announcement, two measures down, and one flat.
Joe Staton, Client Strategy Director at GfK, commented: “This clear trend of growing confidence reflects the forecast of a rebound for the UK’s economy during the second half of the year.
“The improvement in the consumer mood since January is welcome, but the pandemic has hit household finances hard and, on the road ahead, we will still see potential concerns over new variants, rising inflation and the debt overhang. Nevertheless, there’s every chance that, as the recovery gains momentum and the numbers get stronger, confident consumers will continue to spend and drive the wheels of UK finances into the summer and beyond.”
NAM Implications:
- Every little helps…
- …but many pipeline negatives have yet to emerge.
- Especially an uncertain, confused but super-savvy consumer…
- …determined and unable…
- …to settle for anything less than demonstrable value for money.
- Winners will be suppliers and retailers that deliver more than it says on the tin.
- Always…
