Extract from Redwood Financial’s Economic Review March 2021
Official statistics show that retail sales staged a partial recovery in February, while more recent survey data has revealed a muted sense of optimism amongst retailers.
According to the latest ONS figures, retail sales volumes rose by 2.1% in February following January’s lockdown-induced plunge of over 8%. ONS said the growth was partly driven by spending on home improvement and outdoor products as consumers began to prepare for an easing of lockdown restrictions. Unsurprisingly, online sales continued to grow, accounting for a record 36.1% of February’s total sales.
Data from the latest Distributive Trades Survey published by the Confederation of British Industry (CBI) suggests March was another difficult month for retailers, with sales volumes remaining below seasonal norms. However, expectations for the current month did turn positive for the first time since December 2019, reflecting the imminent reopening of non-essential stores.
Commenting on the findings, CBI Principal Economist Ben Jones said, “Retailers are looking forward to April with a sense of optimism, given the potential re-opening of the sector across the UK. However, it is clear that the potential easing of domestic restrictions next month will not be a panacea for all retailers. Expectations point to a fairly muted recovery.”