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April showers dampen UK retail sales as shoppers opt to stay indoors

A general view of Buckingham Palace one, of the official residences of King Charles III, as pedestrians walk past in London, Tuesday, Feb. 6, 2024.
A general view of Buckingham Palace one, of the official residences of King Charles III, as pedestrians walk past in London, Tuesday, Feb. 6, 2024. Copyright Kin Cheung/Copyright 2024 The AP. All rights reserved
Copyright Kin Cheung/Copyright 2024 The AP. All rights reserved
By Indrabati Lahiri
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The removal of non-food sales, such as furniture, clothing and footwear, was one reason for the disappointing figure.


Retail sales in the UK were down sharply in April, with a fall of -2.3% and down further from March's -0.2% in March, according to the Office for National Statistics (ONS). 

The figure, the largest drop in retail sales in the past four months was much worse than analyst expectations of -0.4%. 

The main reason for this was a drop in sales volumes across several sectors, especially non-food sales, which dropped 4.1%. The sectors include sports equipment, furniture, clothing, games and toys and more.

Food costs remain high

Bad weather for most of April was seen as the main culprit, deterring several in-store shoppers from venturing out too much. Food sale volumes also slid for the third month in a row, as food costs continue to be high. 

Similarly, petrol sales also saw the biggest monthly decline since October 2021.

Online retail sales also suffered, with food stores seeing a decline of 1.9%. Online sales for textiles, clothing and footwear came in at -1%, whereas household goods saw online sales drop -2%.

For the three months to April, retail sales were 0.7% lower, compared with the previous three months.

Year-on-year retail sales also came in at -2.7% for April, down from 0.4% in March and well below market estimates of -0.2%.

Oliver Vernon-Harcourt, head of retail at Deloitte, said as reported by Yahoo Finance: "Though consumer confidence continues to rise, many remain apprehensive and are not yet loosening their purse strings, especially on non-essential items and goods such as clothing and footwear.

"Consumers are focused on value, with the likes of own-label food remaining resilient. Overall, this is a clear sign that, despite inflation easing, retailers' road to recovery will require them to continue to invest into product ranges that target consumers of all budgets."

UK consumer confidence rises to highest since December 2021

However, despite disappointing retail sales in April, UK consumer confidence in May rose to the highest level since December 2021, according to the GfK Consumer Confidence indicator. May's figure showed consumer confidence was up to -17, rom -19 in April, which was also more than analyst expectations of -18.

Although May's reading is still negative, meaning that consumers are still concerned about the state of the economy, saving more than they are spending and potentially remaining anxious about the future of their jobs and financial situations, it still shows a marked improvement from April.

Cost of living concerns remain high

Joe Staton, client strategy director at GfK said in a press release: "There was another strong showing for the UK Consumer Confidence index this month, driven by a jump in the outlook for our personal finances (up five) and a boost for our view on the wider economy in the coming year (up four).

"The only negative in May is the slight dip in our major purchase measure (down one point to -26), reinforcing the fact that the cost-of-living crisis is still a day-to-day reality for all of us.

"However, with the latest drop in headline inflation and the prospect of interest rate cuts in due course, the trend is certainly positive after a long period of stasis which has seen the overall index score stuck in the doldrums.

"All in all, consumers are clearly sensing that conditions are improving. This good result anticipates further growth in confidence in the months to come."

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