High prices eat into retail sales volumes

Something went wrong with retail sales in March.
The volume of retail sales dropped by 0.3% in January-March compared with the same period of the previous year according to provisional data, whereas retail sales had risen by a moderately healthy 2.6% in January-February.
In February alone, retail sales rose by 3.1% compared with the same period of the previous year. Compared with January, the February index fell by 4.7%, probably because the annual sales would have boosted sales in January.
On the value side, the turnover index in January-March 2011 is provisionally estimated to have increased by 4.2% compared with the corresponding period of 2010. Thus, while prices rose, volumes actually fell.
In February alone the turnover value index rose by 7.4% compared with February 2010.
The combination of higher values and a decline in volumes suggests that consumer price inflation, now running at more than 3%, is dampening demand.
Fiona Mullen, Sapienta Economics Ltd