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Washout for UK retailers as rain spurs sharp drop in April sales
Global Banking & Finance Review®
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By Andy Bruce
(Reuters) -British retail sales slid by far more than expected in April as rainy weather kept shoppers away, in more mixed economic news for Prime Minister Rishi Sunak ahead of a national election, data showed on Friday.
Sales volumes dropped by 2.3% in April alone after a 0.2% fall in March, which was downwardly revised from a flat reading, the Office for National Statistics said.
The data was worse than any economist predicted in a Reuters poll, which had pointed to a drop of around 0.4% on the month.
Overall the data added to a mixed picture of economic data in recent days. Earlier on Friday, market research firm GfK said consumer confidence rose in May to its highest in nearly two-and-a-half years, but business surveys disappointed on Thursday.
Sunak, whose Conservatives are trailing badly in opinion polls ahead of the July 4 election, hopes to persuade voters that the economy has turned a corner after exiting recession that lasted through the second half of 2023.
“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 stats agency was confident that it had adjusted the figures for the timing of the Easter holidays.
The earlier date of Easter this year meant spending in the run-up to the holiday took place in March not April, which affected British Retail Consortium data published earlier this month.
Analysts said there were reasons for optimism in future months.
“Retailers will be hoping that the better weather in May and the start of a summer of sport with the Euros, Wimbledon and the Olympics will provide a fillip for trading after a highly disappointing start to 2024,” Lisa Hooker, leader of Industry for consumer markets at accountants PwC, said.
This month food and department store retailer Marks & Spencer reported a 58% rise in annual profit, while clothes and fashion chain Next sounded upbeat about its prospects after previously predicting a pickup in consumer sentiment.
Some home improvement stores however reported weakening demand.
Compared with a year ago, sales were 2.7% lower in April, the ONS said – again far short of the consensus for a 0.2% drop.
Surveys published by Barclays and the British Retail Consortium earlier this month showed consumers kept a tight rein on their spending in April.
The drop in sales was less marked excluding petrol, with volumes falling by 2.0% on the month, the ONS said.
(Reporting by Andy Bruce; editing by William James, Paul Sandle and Michael Perry)
Consumer confidence is a measure of how optimistic or pessimistic consumers are regarding their expected financial situation and the overall economic environment.
Retail sales refer to the total receipts of retail stores, indicating consumer spending and demand for goods and services in the economy.
Economic growth is the increase in the production of goods and services in an economy over a period, typically measured by the rise in Gross Domestic Product (GDP).
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