Retail sales fall on weather hit but department stores provide bright spot
Retail sales fell in the three months to March as bad weather froze petrol sales, although department stores provided an unlikely bright spot thanks to improved web traffic.
The volume of sales fell by 0.5 per cent in the three months to March, in line with economists consensus expectations, according to the Office for National Statistics (ONS).
A 7.4 per cent petrol sales slump was by far the biggest drag on the figures, but online department store offers around Easter and Mother's Day seemingly enticed more customers as sales rose by 0.8 per cent in March – online sales at department stores were 33 per cent higher than a year earlier.
Industry figures warned the data were likely to not be representative owing to the extreme weather. Ian Gilmartin, head of retail and wholesale at Barclays Corporate Banking, said the data show "not a lot", but added "it is reassuring to see online stepping up and managing to take some of the strain".
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Economists predict much of the weather-related hit will be made up in later months as consumers are able to spend the money held back. Growth is expected to slow in the first quarter as a result, but will bounce back later, according to consensus expectations.
Rhian Murphy, ONS senior statistician, said: "Retail sales fell in the first quarter due to a large decline in March with petrol sales seeing a significant slump as a result of the poor weather keeping many shoppers indoors.
"However, the snow actually helped boost online spending with department stores in particular seeing growth in their web sales."
Retailers have faced a torrid year, as inflationary pressures have squeezed customers' spending power. Real wages only started rising on average in the year to February, after a year of falling, according to the ONS.
The fall in consumer spending has contributed to a wave of administration and store closures at household names, including Toys R Us, Maplin, New Look, and Carpetright.
While the return to real wage growth has prompted some economists to hope for a pick-up in spending, and therefore the economy, fiscal measures introduced at the start of the new tax year and rising interest rates are likely to put a dampener on any strong bounce back, according to Simon French, chief economist at Panmure Gordon.
Read more: Retail sales growth beats analysts' expectations
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