UK retail sales "fell off a cliff" in April thanks to an early Easter and unpredictable weather, according to figures from the British Retail Consortium, leaving economists still hunting for a revival in consumer spending.
Like-for-like retail sales fell 4.2 per cent year on year in April, from a 1.4 per rise in March, and marking the largest fall since 2005. A Reuters poll had forecast a 0.8 per cent fall. The three-month average saw slight growth, rising 0.4 per cent.
The reading coincides with a string of gloomy assessments from UK retailers, including baker Greggs and retail property owner St Modwen.
Helen Dickinson, chief executive of BRC said: “With much of the spending in preparation for the bank holiday weekend falling in March this year, a record low in sales growth, in contrast to last year’s record high, does not come as a surprise. However, even once we take account of these seasonal distortions, the underlying trend in sales growth is heading downwards.”
Testing times
Paul Martin, head of retail for KPMG said it was more helpful to look at the three-month average but noted that this pointed to sales growing only modestly.
“These are indeed testing times for retailers,” he said.
Samuel Tombs, chief UK economist for Pantheon Macroeconomics, said the survey added to evidence that consumers had tightened their purse strings.
“The widely anticipated revival in growth in consumers’ spending is not emerging this year. While wages are no longer falling in real terms, households’ incomes were hit in April by another round of austerity measures and a rise in minimum pension contributions.”
“In addition, the rise in bank rate in November has prompted households to take a more cautious approach to borrowing and has hit the housing market hard, depressing consumers’ confidence.” – Copyright The Financial Times Limited 2018
