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Retail sales rose 3 per cent in April against last year, the Office for National Statistics (ONS) said today. The rise, which was better than expected, has prompted optimism that the worst of the recession has passed for retailers. But analysts cautioned that the timing of Easter, which this year fell in April, has inflated the figures.
Sales rose 0.7 per cent between March and April. Rises in food prices have inflated overall figures, but last month saw strong volumes growth, which strips out the impact of inflation. Sales volumes at non-food stores rose by 2.8 per cent. Recent spring sunshine also helped textile, clothing and footwear sales to an 11.9 per cent rise in sales, but household goods suffered an 8 per cent fall.
Last week the ONS reduced its volume sales figures after a change in the way it takes price changes into account, which followed criticism from economists and retailers. The official statistics had been criticised for systematically inflating retail sales. The ONS retail figures are consistently higher than other measures, such as the British Retail Consortium (BRC) and the CBI's surveys.
Howard Archer, chief economist at IHS Global Insight, said: "Even allowing for the major boost to retail sales coming from this year's later Easter and very good weather over the holiday period, the 0.9 per cent rise in retail sales in April boosts hopes that consumers are feeling a little more prepared to spend as their purchasing power is lifted by sharply reduced mortgage payments and retreating inflation."
He added: "The problem remains though that consumers remain under serious pressure from sharply rising unemployment, markedly reduced earnings growth, heightened debt levels and falling house prices.
Richard Hyman, strategic retail adviser to Deloitte, said: "There are pockets of optimism but sustained recovery for the industry as a whole is still some way off. I have seen nothing since the turn of the year to dissuade me of the view that UK retail is looking at a fall in total retail spend of about 3 per cent through 2009.”
Stephen Robertson, director general of the BRC, said: "Fundamental conditions for customers and retailers are still tough. Unemployment is set to grow for the rest of the year and the increasing uncertainty about job prospects will hold back spending for some time.”
Treacherous conditions in the retail sector, particularly for non-food stores, were underlined this morning by Clinton Cards putting its Birthdays chain into administration and JJB Sports reported a 23 per cent fall in sales during recent trading.
Marks & Spencer, Britain's biggest fashion retailer by volume, reported earlier this week that fashion sales were still below the same period last year, despite the recent pick-up in clothing.
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