Retail sales growth sluggish in March

UK retail sales rose by a worse than expected 0.4% from February to March, figures from the Office for National Statistics (ONS) show.

In the month to March food stores increased by 0.1% while predominantly non-food stores increased by 0.3%, the ONS says, with rises across all sectors apart from textile, clothing and footwear stores, which decreased by 1.1%. The largest rise was non-specialised stores at 1.5%.

The ONS has also revised February's growth up to 2.5% from an initial reading of 2.1%.

Sales volumes in the three months to March decreased by 1.7% compared to the previous three months. This is the largest decrease since monthly records began in January 1988.

Year on year, the volume of retail sales in March was 2.2% higher than in March 2009, while the seasonally adjusted value of retail sales in March rose by 4.4% from the previous year .

Economists believe the subdued numbers point to restricted economic growth in the future.

"March's disappointing growth in retail sales fuels our suspicion that the upside for consumer spending - and hence overall economic growth - will be limited in 2010 as households still face very challenging conditions," says Howard Archer, the chief UK and European economist at IHS Global Insight.

"The challenging conditions facing consumers notably include high unemployment and still falling employment, low underlying earnings growth, elevated debt levels, and January's value-added tax hike."