Retail sales rebound in April, but high inflation takes toll

However, retail sales volume recovered slightly by 0.5 percent in April due to the Easter holidays, however, high inflation and tensions on household finances continue to hinder spending.

Non-food stores sales volumes rose by 1.0 per cent during the month, compared to a drop of 1.8 per cent in March, when a particularly rainy start to spring deterred shoppers.

As grocery inflation remains at record highs of circa 17.1 per cent, food stores sales volumes rose by 0.7 per cent in April 2023, following a drop in March 2023 of 0.8 per cent.

However, the volumes were 2.7 per cent below their pre-coronavirus February 2020 levels, as householders continue to spend cautiously when doing their weekly shopping.

Online shopping grew 0.2 per cent during the month, following a 1.4 per cent drop in March.

The figures show the impact of inflation, which is currently at 8.7 per cent, on British spending habits. When compared with their pre-coronavirus level in February 2020, total retail sales were 16.5 percent higher in value terms, but volumes were 0.8 per cent lower as the nation gets less for what they pay for.

After a challenging few months, it is positive to see that retail sales are up 0.5 percent from last month, said Dee Corsi, New West End Company's chief executive.

The Coronation weekend was a massive boost for April, bringing in thousands of international tourists. The importance of international tourists has never been greater, as inflation has hit domestic spending power. As we look towards the typically busy Summer trading period, we are concerned that the UK is on course to miss out on critical economic growth seen in other European countries, which aren't hamstrung by the tourist tax. The data also hint at the possibility of losing out to future Chinese visitors, who are yet to return in numbers. The positive momentum was welcome, said PwC, but could be thrown off by rising interest rates.

The trajectory remains positive, with the best quarterly improvement in retail sales volume since August 2021. This echoes the latest consumer sentiment measures, which has been improving continuously since last autumn, a note circulated this morning said.

With this month's sale likely to be helped by the Coronation and additional bank holidays, we expect the positive momentum to continue in the short term. Retailers will be hoping that the current green shoots are not dampened by higher interest rates or other macroeconomic challenges over the summer.