Tuesday, April 7, 2020

UK retail sales decline 1.3% in April


UK retail sales in April declined by 1.3 per cent compared with the previous month as the greatest downward pressure came from the food sector while cold weather continued to impact trading, according to new data released today.

Compared with March 2013, total food sales fell 4.1 per cent last month, the largest drop in two years as store price inflation drove the contraction, according to the Office for National Statistics (ONS).

Explaining the surprise decline, the ONS said: “Feedback from supermarkets suggested that the cold weather continued to impact on sales.

“In particular, the weather hindered sales within their spring and summer ranges, including barbecue items and garden furniture.”

Retail sales volumes crept up 0.5 per cent on the same period last year while sales values increased 1.3 per cent and the online sector reported particularly strong growth which helped buoy the overall figure.

Online sales remained high at 10 per cent in April as unseasonable weather kept customers away from stores and average weekly online spent soared 13.2 per cent on the same period last year to £571.7 million

Commenting on these positive results, Retail Sector Lead at Lloyds Bank Keith Richardson said: “Online sales continued to grow, in-line with their broader upward trajectory.

“Competitive pricing is a key tactic at present but it remains to be seen how retailers‘ margins are being impacted. The cost of online fulfilment against this backdrop may also be a concern for many.

“Retailers will be hoping for dry conditions for the forthcoming bank holiday and the remainder of the month to encourage spending on spring and summer goods and attract footfall, albeit they are not expecting a repeat of the mini-heat wave seen during the first May Bank Holiday.”

The growing popularity of online shopping was not enough to reverse the overall sales slump however and analysts have warned that economic recovery may still be some way off.

Samuel Tombs, UK Economist at analyst firm Capital Economics, said: “April‘s monthly fall in the official measure of retail sales volumes suggests that the recovery in high street spending at the start of the year has begun to fade.

“April‘s average temperature was only a smidgen below its historical average, hinting that some of the decline in food store sales may reflect other factors too, such as the recent pick-up in food price inflation.

“What‘s more, sales of clothing, household goods and in department stores all failed to bounce back from their sharp falls in March.

“Accordingly, we would not bank on an imminent reversal of April‘s drop in retail sales volumes.”


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