British Retail Sales Grow Further

Confirmation that the British economic recovery is a consumer lead one has come this morning in the form of a retail sales update. The headline year on year Retail Sales number shows a healthy 4.2% growth, this compares with last month’s 3.3% reading of this statistic, the market consensus was for an expansion to 3.8%.

A closer look at the benchmark number reveals that the month on month growth was 0.1% in March, this is off on February’s 1.2% growth spurt but well ahead of a consensus estimate for a 0.4% contraction. The Retail Sales figure excluding fuel comes in at -0.4% month on month versus an anticipated -0.5% and a prior reading of 1.3%. Finally, the year on year ex-fuel figure printed at 4.2% slightly missing the 4.3% expectation but easily up on February’s number of 3.9%.

The rise in British retail sales for the month is being cautiously welcomed. The fact is that the figures are somewhat distorted by the timing of the Easter break this year, by exactly how much will be difficult to discern. There is however strong evidence forming of a persistent underlying growth trend in retail activity. The Confederation of British Industry yesterday published it’s Retail Sales Index which showed a strong pick up to 30 in April from a March figure of just 13.

Further evidence of the strength in the retail sector comes from a closer examination of the specific areas of growth, it appears that discretionary items in particular are leading the way which is a good indicator of consumer confidence in the economy.
This theme is extended to transportation fuel, autos in particular, this number is up 4.8% on the month, a reflection of both increased economic activity within the British economy but also of stronger consumer activity as individuals take to the roads on discretionary journey’s.