ONS Data Shows Retail Sales Increased In March

The ONS has published retail sales data for March, revealing that retail sales rebounded during the month, ahead of stores reopening on 12th April.

Key points include:

• Retail sales volumes continued to recover in March 2021, with an increase of 5.4% when compared with the previous month reflecting the effect of the easing of coronavirus (COVID-19) restrictions on consumer spending; sales were 1.6% higher than February 2020 before the impact of the coronavirus pandemic.

• Non-food stores provided the largest positive contribution to the monthly growth in March 2021 sales volumes, aided by strong increases of 17.5% and 13.4% in clothing stores and other non-food stores respectively.

• Food stores reported monthly growth of 2.5% in March 2021, with strong growth in specialist food stores (butchers and bakers) likely reflecting the continued closure of the hospitality sector during the Easter period.

• Automotive fuel retailers also reported strong monthly growth of 11.1% as travel restrictions were eased towards the end of the reporting period.

• Despite strong March figures, retail sales for the quarter have been subdued overall; in the three months to March 2021, retail sales volume fell by 5.8% when compared with the previous three months, with strong declines in both clothing stores and other non-food stores as a result of the tighter lockdown restrictions in place.

• The proportion spent online decreased to 34.7% in March 2021, down from 36.2% in February 2021 but still above the 23.1% reported in March 2020; the value of online spending did increase in March, but spending in-store increased at a faster rate.

• Estimates for both the amount spent and the quantity bought were higher in March 2021 than a year ago, when lockdown restrictions were first implemented. The amount spent increased by 7.3% and the quantity bought increased by 7.2% compared with the same month a year earlier.

• Total retail sales levels for both the amount spent and quantity bought were lower than pre-pandemic levels in both January and February 2021, however, March marked a return to sales levels higher than those witnessed in February 2020, before the pandemic began, despite continued restrictions to non-essential retail.

• Within the other non-food store sector, the increase of 13.4% in March 2021 was driven by growth in a number of sectors including second-hand good stores, where auction houses reported an increase in sales of high-end items. Medical goods retailers also reported strong monthly growth of 29.4% with anecdotal evidence from retailers suggesting an increase in the purchase of mobility equipment from older consumers who were venturing out more following the vaccination rollout. Garden centres and retailers of plants and flowers reported monthly growth of 7.4%, with retailers reporting above average sales for this time of year attributed to an increased interest in gardening following lengthy lockdown periods.

Commenting on the Office of National Statistics retail sales figures for March 2021, Lisa Hooker, consumer markets leader at PwC, said:

“Today’s retail sales figures for March are better than expected, with both an improvement on February’s already positive performance, as well as an almost 8% increase on this time last year. And this has occurred even with non-essential stores closed across the country and against the comparison of grocery stockpiling at the start of the first lockdown last March.

“Looking more closely at different categories of stores, there were improvements across the board, with grocery stores benefitting from the continued closure of hospitality and the lack of product shortages and empty shelves they experienced last year.

“Meanwhile other categories have been helped by both increased online penetration (still 35% of overall sales, compared with 20% last January), as well as consumer sentiment that is at its highest level since before the Global Financial Crisis, according to PwC’s latest research.

“In particular, clothing sales, while still over 40% lower than pre-pandemic levels, continued their strong bounceback, with a 17.5% improvement compared with February, suggesting that consumers are cautiously looking forward to the end of lockdown with new outfits ready for newly permitted social events.

“Outside of core retail sales, the increase in petrol sales also reflects the ending of the stay-at-home order and greater willingness to travel, which is a promising sign as the country continues to open up from lockdown.

“However, much though these figures will give cheer to the whole sector, retailers will be hoping that these positive signs translate into a sustained return to the physical stores as they reopen across the UK over the course of April. The real test of whether pent-up demand can be turned into actual sales will come with next month’s figures.”

Source : ONS and PwC

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