Retail sales plunge in ‘dull and wet’ April in fresh sign of fading optimism
Retail sales plummeted in April due to the poor weather in the latest sign that the UK’s economic progress might be fading following a strong start to the year.
According to the Office for National Statistics (ONS), retail sales fell 2.3 per cent in April, a much worse fall than predicted by economists.
Most forecasters only expected a 0.2 per cent fall. March’s figures were also revised down from showing no growth to a 0.2 per cent fall.
“Sales volumes fell across most sectors, with clothing retailers, sports equipment, games and toys stores, and furniture stores doing badly as poor weather reduced footfall,” the ONS said.
The ONS largely put this down to the weather, noting the Met Office’s description of April as a “dull and wet month”. April received 155 per cent of average rainfall and just 79 per cent of average sunshine.
Non-food stores sales suffered particularly badly, dropping 4.1 per cent in April. This was the joint largest fall since January 2021.
“Retail sales were as gloomy as the weather in April,” Bogdan Toma, partner at McKinsey said. “An early Easter and persistent wet weather washed away demand. It’s clear there is a lag between inflation softening and sales volumes picking up.”
The figures will be another knock to Rishi Sunak, who has put an improving economy at the heart of his election pitch. A closely watched survey, released yesterday, suggested that growth is slowing after the UK’s strong performance in the first quarter.
“The UK is likely to see a weaker outturn for GDP growth in Q2, after Q1’s very strong performance,” Peter Arnold, EY’s chief economist said.
More positively for Sunak, GfK’s consumer confidence index showed an improvement in May. The index rose by two points in the month in a sign that Brits are becoming increasingly hopeful about their financial position.
Many economists suggested that this consumer confidence reading augured brighter days ahead, particularly given the recent volatility in the retail sales figures.
“Retail sales volumes collapsed in April, but the last time that happened, in December, they quickly bounced back,” Rob Wood, chief UK economist at Pantheon Macroeconomics said.
With inflation set to fall further and interest rate cuts on the horizon, most economists thought consumer spending would pick in the remainder of the year.