Price of petrol is driving local shopping

petrol-sign.jpg

Retail sales were up in March, but not for the supermarkets.

UK retail sales experienced a surprise boost in March, with smaller shops doing particularly well for a change.

According to the Office of National Statistics report, sales volumes rose by 0.2% compared with the previous month. Economists had predicted a 0.5% drop following February’s 0.9% fall in sales. The “seasonally adjusted” figures, which take into account the fact that Easter fell in March last year, make even better reading, showing a 1.3% rise.

Food and online sales saw the most improvement, with the former being up 0.7% and the latter up 0.6%. Food sales are still 1% lower than they were a year ago, however.

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But the most surprising fact about the report is that smaller shops are doing especially well. The cost of petrol is deterring consumers from driving to large stores so they are doing more of their shopping locally. The ONS report showed that food sales at smaller retailers were 2.5% higher than last year, whereas supermarkets were down by 4.1%, continuing a surprise reversal in general shopping trends that has been apparent since January.

However, Emmanuel Hembert, principal at global strategy consultancy AT Kearney said: "While the retail rebound is a welcome surprise, we would urge caution. Optimism over UK retail must be moderated. We believe that the uplift is linked to specific sectors and circumstances – notably the impact of the Royal wedding."

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