Friday, April 20, 2012

UK retail sales boosted by petrol panic buying

Drivers-queue-for-petrol--008 Panic buying of petrol after cabinet office minister Francis Maude advised people to fill up jerry cans to beat the looming fuel strike boosted retail sales across the economy last month, official figures reveal.

The Office for National Statistics said the volume of retail sales rose by 1.8% month on month in March – and "one of the main drivers" came from petrol sales.

The monthly increase in sales by "predominantly automotive fuel stores" was 4.2%, the largest since January 2011, when motorists took to the roads again after being snowed in during the previous December.

The statisticians said the increase "was a result of consumers purchasing more fuel in case the threat of a fuel strike in the latter part of the month came to reality".

Strong sales in clothing stores as shoppers stocked up their summer wardrobes early in March's unseasonably warm weather also helped to boost overall sales volumes, the ONS said. Sales in clothing and shoe shops were up by 2.8% on the month.

Despite the petrol panic, analysts said the overall tone of the retail sales figures was positive, with sales volumes 3.3% higher than a year ago.

Richard Lowe, head of retail and wholesale at Barclays, said: "The tide may finally be turning for the high street, and with unemployment falling, there is certainly a feeling the stability of the past few months is here to stay."

Howard Archer, of IHS Global Insight, said stronger demand from shoppers could signal that the economy has returned to growth: "Given the dominant role of consumer spending, it is certainly difficult to equate the 0.8% quarter-on-quarter increase in retail sales in the economy with an economy that is not growing."

Official figures to be published next Wednesday will show whether GDP growth was positive from January to March. A negative number would signal a return to recession, after a decline in the final quarter of 2011.

The ONS also confirmed that high street inflation remains high – though below the level in the economy as a whole. The "implied price deflator", which measures how fast prices are rising, was 2.5% in March, up from 2.4% in February, it said.

The Guardian