Retail sales up: but then January-March has been an exception

We shouldn't call recovery just yet.

With the British Retail Consortium showing that retail sales increased in March by 3.7 per cent on a total basis and by 1.9 per cent on a like-for-like basis, many are now suggesting that the beleaguered retail sector is seemingly moving into recovery mode. The March numbers follow on from an upbeat February and both have helped to contribute to first quarter sales growth which was the strongest of any three-month period since December 2009.

While such momentum is clearly welcome, in order assess the true strength of the recovery the figures do need to be set in a wider context.

With the earlier timing of Easter this year, it was always inevitable that March would be a good month for sales growth. What is perhaps surprising, however, is that given this sales growth was not higher. Indeed, despite the boost of Easter, both the total and like-for-like growth rates were relatively subdued to those seen in February. So, if anything, the March numbers represent a slight deterioration in growth momentum rather than a strengthening.

The other point to which attention needs to be drawn is that the growth was fairly unevenly distributed. Food retailers, helped in large part by inflation, saw some good gains. However, the clothing sector had a torrid time as the unseasonal weather drove down demand for spring merchandise.

Then there is the unusually buoyant demand for electricals. On this front, while there is inevitably strong demand for products like tablets, some of the growth reported by retailers is likely to have come from the collapse of chains like Comet and Jessops – the sales of which have been reallocated to those left standing. Neither the British Retail Consortium nor the Office for National Statistics adjust for such failures which means, in essence, that their aggregation of growth reported by retailers becomes divorced from a proper reading of actual underlying consumer spending growth. While the impact of this methodological anomaly should not be overstated, it is worth bearing in mind when assessing the growth figures.

None of this takes away, of course, from the strong growth seen in February which will, inevitably, be pointed to as a sign that things are getting better. However, even here context remains important. The February numbers were partly flattered by a weaker January when some spending was postponed due to the winter weather. This was especially true of fashion where not only did depleted footfall on high streets dint sales, but the cold temperatures were out of kilter with the spring stock which was on the shop floor towards the end of the month. Comparatively, most of February was fairly mild which encouraged consumers out onto the high street and into buying spring fashion lines.

So, in many ways, the first three months of this year have been fairly exceptional – in terms of the weather, in the timing of Easter, and in the amount of churn with various failures in the sector. As such, this is perhaps not the best period over which to pronounce that a meaningful and sustained retail recovery has begun. Only when we get into May and June will we have a more rounded picture of retail prospects.

Retail sales increased in March. Photograph: Getty Images

 Managing Director of Conlumino

Photo: Getty
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Who will win the Copeland by-election?

Labour face a tricky task in holding onto the seat. 

What’s the Copeland by-election about? That’s the question that will decide who wins it.

The Conservatives want it to be about the nuclear industry, which is the seat’s biggest employer, and Jeremy Corbyn’s long history of opposition to nuclear power.

Labour want it to be about the difficulties of the NHS in Cumbria in general and the future of West Cumberland Hospital in particular.

Who’s winning? Neither party is confident of victory but both sides think it will be close. That Theresa May has visited is a sign of the confidence in Conservative headquarters that, win or lose, Labour will not increase its majority from the six-point lead it held over the Conservatives in May 2015. (It’s always more instructive to talk about vote share rather than raw numbers, in by-elections in particular.)

But her visit may have been counterproductive. Yes, she is the most popular politician in Britain according to all the polls, but in visiting she has added fuel to the fire of Labour’s message that the Conservatives are keeping an anxious eye on the outcome.

Labour strategists feared that “the oxygen” would come out of the campaign if May used her visit to offer a guarantee about West Cumberland Hospital. Instead, she refused to answer, merely hyping up the issue further.

The party is nervous that opposition to Corbyn is going to supress turnout among their voters, but on the Conservative side, there is considerable irritation that May’s visit has made their task harder, too.

Voters know the difference between a by-election and a general election and my hunch is that people will get they can have a free hit on the health question without risking the future of the nuclear factory. That Corbyn has U-Turned on nuclear power only helps.

I said last week that if I knew what the local paper would look like between now and then I would be able to call the outcome. Today the West Cumbria News & Star leads with Downing Street’s refusal to answer questions about West Cumberland Hospital. All the signs favour Labour. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.