Belfast Telegraph

Retail sales surge defies high street pessimism

By Jamie Grierson

Retail sales unexpectedly grew last month, official figures revealed, as department stores bucked the gloomy trend on the high street.

Retail sales volumes grew by 0.2% month-on-month in March, the Office for National Statistics (ONS) said, against City expectations of a 0.5% decline.

Department stores increased 1.4% month-on-month, the ONS said, while the launch of Apple's iPad 2 and the Nintendo 3DS helped lift sales at computer and telecoms stores.

While food stores reported a 0.7% month-on-month increase in sales volumes, they saw a 0.1% annual decline, as rising food prices are forcing consumers to be more cautious with their spending than they were a year ago.

Economists had expected sales volumes to decline in March following a raft of disappointing company updates and dismal surveys from the likes of the British Retail Consortium (BRC).

Entertainment group HMV, Currys owner Dixons Retail and children's clothing retailer Mothercare all issued profits warnings in March, while wine merchant Oddbins entered administration.

The BRC added to the gloom when its most recent survey revealed that total retail sales were down 1.9% in March - the biggest decline since the start of the trade body's monthly survey in 1995.

And Anastasia Ventures, the company behind homegrown furniture retailer Dekko, is in administration by voluntary arrangement one month after founder Michael Bambrick said he would be closing its two stores in south Belfast and Junction One, Co Antrim, due to declining sales.

So yesterday's figure will come as a surprise to some economists who had feared worse.

Howard Archer, chief UK and European economist, said the increase in sales volumes suggests "the consumer is not quite as flat on his back as had been feared".

However, within the sales data, there were signs of weakness on the high street, as sales volumes in non-food stores fell by 0.3% month on month.

Clothing and household goods stores also dropped 0.6% month on month, while other stores fell 0.3%.

A final administration sale will be held at Dekko's Boucher Road store in Belfast tomorrow.