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Cold weather hurts UK retail sales in March

A pedestrian walks past a branch of Marks and Spencer on Oxford Street, central London April 11, 2013.REUTERS/Andrew Winning
A pedestrian walks past a branch of Marks and Spencer on Oxford Street, central London April 11, 2013.REUTERS/Andrew Winning

LONDON (Reuters) - Unusually cold weather hurt British retail sales in March, official data showed on Thursday, confirming the fragile state of the country's economy in the first three months of 2013.

Retail sales volumes shrank 0.7 percent on the month to stand 0.5 percent lower on the year, the Office for National Statistics said, broadly in line with economists' forecasts.

Consumer spending has been under pressure for years, with inflation outstripping wage growth, and data earlier this week confirmed this trend.

Thursday's data suggest Britain's economy has at best eked out modest growth in the first three months of 2013, which it needs to avoid its third recession in less than five years.

Economists had expected a fall in retail sales volumes after strong growth in February due to a rebound from earlier snowy weather, and the ONS said that the coldest March since 1962 seemed to have kept shoppers at home.

Non-food sales fell 4.0 percent in March, their biggest monthly drop since January 2010, and this was only partly offset by the biggest rise since March 2009 in the smaller 'non-store retailing' category, which includes online shopping.

"Feedback from department stores, clothing stores and household goods stores suggested that sales were dampened by the weather, as they prepared their stores for the spring season," the ONS said.

Economists said forecasting March retail sales data was complicated by Easter falling in the month as well as bad weather towards the end of the month. Other surveys and retailers' earnings reports have also been mixed.

The British Retail Consortium had painted a relatively rosy picture - with 3.7 percent annual growth in the value of retail sales - but the Confederation of British Industry was more downbeat.

The ONS said retail sales were up just 0.1 percent on the year in value terms.

(Reporting by David Milliken and Olesya Dmitracova)

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