Retail sales, Great Britain: March 2018

• In the three months to March 2018 (Quarter 1), the quantity bought in retail sales fell by 0.5% when compared with Quarter 4 (Oct to Dec) 2017, with declines in all sectors except for department stores and non-store retailing.

• The month-on-month growth rate fell by 1.2% due to a large fall of 7.4% from petrol sales; a likely consequence of adverse weather conditions, which impacted travel.

• Department stores were the only sector to show positive growth in March at 0.8%, with feedback from retailers suggesting that online offers for Mothering Sunday and Easter boosted internet sales more than usual during the adverse weather.

• The quantity bought in supermarket stores declined in March, while specialist food stores saw strong growth; possibly due to the easier access to these stores during snow.

• Online sales accounted for 17.4% of all retailing, seasonally adjusted in March 2018, compared with 15.9% in March 2017; the strongest growth on the same month a year earlier came from department stores at 33%.

Commenting on today’s official retail figures, Rhian Murphy, ONS Senior Statistician said:

"Retail sales fell in the first quarter due to a large decline in March with petrol sales seeing a significant slump as a result of the poor weather keeping many shoppers indoors. However, the snow actually helped boost online spending with department stores in particular seeing growth in their web sales.

"Various shops also reported increased spending on gifts in the run-up to Easter and Mother's Day, which also helped boost online sales."

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 25 February 2018 to 31 March 2018.

Improvements to the deflators derived from consumer price inflation data have resulted in negligible revisions to total retail sales from 2012 onwards. Please note that these changes do not impact the results published in the consumer price inflation statistical release.

Unless otherwise stated, the estimates in this release are seasonally adjusted.

The Retail Sales Index (RSI) measures the value and volume of retail sales in Great Britain on a monthly basis. Data are collected from businesses in the retail industry and the survey’s results are used to produce seasonally adjusted monthly, quarterly and annual estimates of output in the retail industry at current price and at chained volume measures (removing the effect of inflation). Unless otherwise stated, all estimates included in this release are based on seasonally adjusted data.

The RSI is an important economic indicator and one of the earliest short-term measures of economic activity. It is used in the compilation of the national accounts and widely used by private and public sector institutions, particularly by the Bank of England and Her Majesty’s Treasury to assist in informed decision- and policy-making.

Summary information can be found in the RSI Quality and Methodology Information report.

In March 2018, estimates for both the quantity bought (volume) and the amount spent (value) in the retail industry grew by 1.1% and 3.0% respectively when compared with a year earlier (Table 1). The quantity bought and amount spent in the three months to March 2018 compared with last year also increased at 1.4% and 3.7% respectively.

In contrast, there was a fall in the quantity bought at 1.2% and a fall in the amount spent at 0.9% when compared with February 2018. The underlying trend as outlined by the three-month on three-month movement remained flat for amount spent and fell 0.5% for the quantity bought, showing a slowdown in the retail industry in recent times (Figure 1).

Looking at the underlying pattern with the quarter-on-quarter movement, the quantity bought increased at a steady rate up to Quarter 3 (July to Sept) 2007, coinciding with relatively stable store prices. As consumers bought more goods during this period, the amount spent increased steadily as a result.

Following this period of growth, the quantity bought was stable between Quarter 4 (Oct to Dec) 2007 and Quarter 1 (Jan to Mar) 2013. Consumers continued to buy the same quantity of goods, but with rising prices, spending within stores continued to increase steadily during this period.

As prices began to flatten in early 2013 and then decline, the volume returned to one of growth. As prices began to rise again in late 2016, a period of restricted growth followed for the quantity bought in stores, with the latest quarter reporting the first fall since Quarter 1 2017.

Quarter 1 2018 saw declines across all sectors except for department stores and non-store retailing, due mainly to large monthly falls in a range of sectors (Figure 2).

In March 2018, there was a negative contribution of 1.2 percentage points for the quantity bought in retail sales when compared with February 2018. Department stores were the only positive contribution to retail sales at 0.1 percentage points and while non-store retailing and household goods stores remained flat, all other sectors showed a fall on the month. As seen in Table 2, petrol sales fell by 7.4%, providing the greatest contribution to the overall decline at negative 0.8 percentage points. This could be attributed to less travel within March due to the snow and adverse weather experienced across the country (Section 6).

The Met Office summary for March 2018 said that “March began with an exceptionally cold easterly flow and widespread snow, and daytime temperatures remained below freezing in many parts of the country” and reports on the numerous road closures affecting travel across the country.

Petrol stations

The quantity of petrol bought in March 2018 decreased by 7.4% when compared with February; the largest fall since a decline of 9.8% in April 2012. In both April 2012 and March 2018, the provisional UK mean temperature for the month was below the 1981 to 2010 long-term average and the Met Office also reported difficult travelling conditions in April 2012 within parts of the country.

We estimate that the fall in petrol sales in March 2018 contributed negative 0.1 percentage points in the three months to March. This equates to approximately a negative 0.01 percentage point impact to gross domestic product (GDP) growth in the quarter.

Food stores

The quantity of food bought declined by 0.6% in March 2018 compared with the previous month due to declines seen in supermarket stores (Figure 3).

Figure 3 shows the growth rates in February and March for each sector that make up predominantly food stores (supermarkets, specialist food stores and alcoholic drinks, other beverages and tobacco). The notable shift to shopping in specialist and alcoholic and other stores in March may be due to the accessibility of these stores during travel difficulties with the snow. Feedback from supermarket retailers suggested a negative impact to sales due to store closures during this adverse weather.

Department stores

Department stores were the only sector to see a positive growth to the quantity bought in March 2018 when compared with February. Feedback from retailers claim that promotions for Mothering Sunday and Easter helped boost sales. While this is expected in March, retailers commented on the success of online offers increasing sales more than usual, due perhaps to the convenience of purchasing goods online during the adverse weather. Department stores saw strong growth in their sales online (Table 3).

Internet sales saw an increase in its proportion of all seasonally adjusted retailing in March 2018 when compared with February 2018, reaching a record high of 17.4% for all retailing online (Table 3).

Non-food stores also reported a record high for its proportion of online sales at 13.6%. Within this sector, household goods stores and department stores increased to record shares of online retailing at 12.8% and 17.1% respectively.

Department stores reported the strongest growth on the same month a year earlier of 33% despite the sector as a whole experiencing a period of restrained growth in recent months (Figure 4).

Figure 4 shows that while there is little movement in the growth rate to total sales in department stores, stronger growth is seen for online purchasing within this sector. This suggests that consumers are shifting from entering the stores to buying goods online. The growth of 33% to online shopping in March 2018 may have been a consequence of the adverse weather, in combination with online promotions, as suggested by retailers.

The only international estimate of retail sales available for March 2018 was published by the US Census Bureau on 16 April 2018. In its advanced monthly sales for retail and food services, March 2018 (PDF, 391KB) they include the amount spent in the US retail industry, including motor vehicles and parts, and food services.

Eurostat also published their latest estimates of the volume of retail trade (PDF, 457KB) across the European Union on 5 April 2018 for February 2018. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with January 2018.

Data for Northern Ireland are published by the Northern Ireland Statistics and Research Agency (NISRA).

It should be noted that accurate comparisons cannot be made against these or other international statistics due to a variety of reasons, including differences in methodology.

We have published an article alongside this release relating to the methodological differences with our main external source for comparison, the British Retail Consortium (BRC).

Our Monthly Business Survey (MBS) for retail sales measures output from the retail industry in Great Britain. It samples 5,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month.

Further qualitative data or information and summary tables can be found in the attached datasets. This includes data on:

• response rates
• standard errors
• revisions triangles
• distribution analysis

The Retail sales Quality and Methodology Information document contains important information on:

• the strengths and limitations of the data and how it compares with related data
• uses and users of the data
• how the output was created
• the quality of the output including the accuracy of the data