Business

UK retail sales fall in March as fuel purchases slump

Woman passes household goods shop in Brighton Image copyright Reuters

UK retail sales fell 0.5% in March from February, dragged down by a 6.2% fall in sales at petrol stations, the Office for National Statistics said.

Excluding petrol, sales rose 0.2% in March, against a 0.6% rise in February, which has been revised down from an initial estimated of 0.7%,

For the first three months of 2015, sales rose 0.9%, down from 2.2% in the first quarter of 2014.

The figures show consumers are still cautious about spending, analysts said.

Keith Richardson, managing director for retail at Lloyds Bank Commercial Banking, said: "Even with continued falls in fuel and food prices, consumers are responding to this current period of uncertainty by being just as careful about their own spending as they have been for the past few years.

"Despite the fact that Mother's Day fell in March and Easter fell early in April, this wasn't enough to bring forward any boost in spending into March, doing nothing to allay fears that while consumers may have a little more money in their pockets, they are spending it on leisure treats like eating out and going on holiday, rather than on High Street goods," he said.

UK economic growth figures for the first three months of 2015 are due to be published next week. Economists said the retail data could herald slower growth.

Alan Clarke, at Scotiabank, said: "The monthly data all point towards sluggish Q1 GDP next Tuesday, not the sort of reading that the coalition government will be hoping for."

But Howard Archer, chief UK and European economist at IHS Global Insight, said that although the retail data was "disappointing", wage growth and low inflation should bolster consumer spending over the coming months.

"Despite March's weaker-than-expected performance, the prospects for retail sales and consumer spending look bright, as purchasing power has strengthened and should continue to do so," Mr Archer said.

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