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

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Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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