U.K. Retail Sales Increase in March on Warm Weather, BRC Says

U.K. retail sales rose for the first time in three months in March as warm weather boosted demand for clothing and outdoor gear, the British Retail Consortium said.

Sales at stores open at least 12 months, measured by value, gained 1.3 percent from a year earlier, the London-based trade group said in an e-mailed report today. That followed 0.3 percent declines in both January and February.

The Bank of England expects inflation to slow to its 2 percent target this year as officials count on easing price pressures to alleviate the squeeze on consumers and help generate a pickup in spending later this year. Still, any recovery in demand may be curbed by rising unemployment and an increase in oil prices that is raising the cost of gasoline.

“The warmth of March was a help but it will take more than a week of sunshine to transform retailers’ fortunes,” BRC Director General Stephen Robertson said in the report. “The overall retail environment is still difficult.”

Including stores open less than 12 months, the value of retail sales rose 3.6 percent in March from a year earlier, according to the BRC report. In the first quarter, food sales increased 1.2 percent from a year earlier on a like-for-like basis, while non-food sales fell 0.4 percent.

The lobby group said annual footwear sales growth increased to its highest since April 2007, while the warm weather last month spurred demand for outdoor home-improvement products and picnic-related gear.

Even so, “discounting remains a key tactic for retailers trying to encourage consumers to spend,” said Robertson. “People are still struggling to balance household budgets against expensive fuel and utilities.”

Separately, KPMG LLP and the Recruitment and Employment Confederation said their index of hiring of full-time staff dropped to 52.4 in March from a nine-month high of 53.2 in February. An index of hiring of temporary workers slipped to 48.5 from 49. Readings below 50 indicate contraction.

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