April sun brings cold comfort as retail sales droop
Retail sales fell last month, but spending was above pre-pandemic levels as the cost of goods continued to rise.
Sales were 0.3 per cent lower than in April last year, but were higher than 2019 levels due to inflation pushing up the price of everyday items, according to the retail sales monitor published by the British Retail Consortium and KPMG.
In the year to April retail sales grew by an average of 6.4 per cent each month. The rate of growth fell to 3.2 per cent at the start of the year and has continued to fall as 30-year-high consumer prices stretch household budgets.
Inflation hit 7 per cent in April and is set to go into double digits in October when the energy price cap is lifted for the second time in a year. Utility bills rose by 54 per cent in the first price cap rise in April.
Helen Dickinson, chief executive of the BRC, said: “Sales growth has been slowing since January, though the real extent of this decline has been masked by rising inflation. Big-ticket items have been hit hardest as consumers reined in spending on furniture, electricals and other homeware, compounded by delays on goods coming from China.”
There was a lift in the sales of garden goods and clothing, thanks to the sunny weather in April, Dickinson added.
Spending on debit and credit cards rose by more than 18 per cent last month as renewed demand for holidays boosted the travel sector.
Figures from Barclaycard showed the average consumer’s spend on utilities was 29 per cent higher last month than in April last year. Growth in spending on essential items has slowed as drivers cut back on their petrol usage and households change their spending habits to save money on groceries.
Travel spending was at its highest since before the pandemic. Spending on hotels, resorts and other accommodation rose by 16.6 per cent compared with the same month in 2019. There was a fall in the sale of flights, but it slowed to -9.9 per cent in April from -12 per cent in March.
José Carvalho, head of consumer products at Barclaycard, said: “The impact of rising living costs on consumer spending is starting to show, with a number of categories — including subscriptions, takeaways, and bars, pubs and clubs — seeing less growth than in March as Brits begin to feel the pinch. However, the improvements seen by airlines and travel agents are particularly positive.”