// Retail sales up despite consumers cutting back on spending amid high inflation
// Like for like retail sales rose 5.2% in April, against a decline 1.7% the year before
Consumers continue to cut back on purchases as high inflation puts pressure on discretionary spending.
The latest study by KPMG and the British Retail Consortium showed retail sales increased 5.2% on a like-for-like basis in April, against a decline of 1.7% the year before.
However, the figure has not been adjusted for inflation – which stands at 10.1% – meaning the rise in sales masked a much larger drop in the volumes of goods.
Food sales jumped 9.8% on a total basis and 10% on a like-for-like basis over the three months to April, while non-food sales edged up 1.2% on a total basis and 0.8% on a like-for-like basis over the same period.
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The new data comes as the Bank of England is expected to raise interest rates again this week as they look to soften the rising cost of living.
Economists predict the latest adjustment will see the interest rate rise 0.25 percentage points to 4.5% – the highest rate in 14 years.
KPMG UK head of retail Paul Martin said: “Retail sales held steady in April with 5% growth on last year, but against a background of higher inflation year-on-year, masking how much is actually healthy growth for the sector.
“Consumer demand has so far been fairly resilient to the twin drags of high inflation and high interest rates, but as government energy support comes to an end for many, savings start to dwindle and other household bills rise, it is likely that the next few months will continue to be challenging as the consumer tank empties.”
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