UK retail figures disappoint in March, as sales decline 1.3%

UK retail sales declined more than expected in March, official figures released by the Office for National Statistics (ONS) on Thursday 21 April showed. According to the ONS, the volume of retail sales, including auto fuel, fell 1.3% month-on-month in March, compared with a 0.5% drop in the previous month and analysts' expectations for a 0.1% decline, while the quantity bought in the retail industry rose 2.7% year-on-year last month, recording growth for the 35th consecutive month.

The figure, however, fell short of the 4.4% gain analysts had expected and was also lower than the downwardly revised 3.6% increase recorded in the previous month.

Average store prices, including petrol stations, fell by 3% in March 2016 compared with March 2015, the 21st consecutive month of year-on-year price falls, while the amount spent in the retail industry decreased by 0.1% compared with March 2015 and decreased by 1.3% compared with February 2016.

Sales volumes in the first quarter as a whole still rose by a reasonable 0.8%, but this was weaker than the 1% increase seen in the previous three months.

Online sales remained strong in March, with the value of goods bought online increasing by 8.9% year-on-year in March 2016. On a month-on-month basis, however, online sales decreased by 0.5%.

The ONS added all store types, except textile, clothing and footwear stores showed increases in the quantity bought compared with March 2015.

"Yet more evidence of a slowdown in the UK's economic recovery comes in the form of today's retail sales figures," said Vicky Redwood, chief UK economist at Capital Economics.

"This was the second drop in a row, meaning that January's sharp jump in sales has now been almost fully reversed."