PwC comments on April 2024 retail sales figures

Commenting on the Office of National Statistics retail sales index for April 2024, Lisa Hooker, Leader of Industry for Consumer Markets:

“Headline retail sales volumes fell precipitously in April, by 2.3% compared with March on a seasonally adjusted basis. Compared with last April, and adjusting for Easter, retail sales fell by 3.0% excluding petrol. At the same time the ONS has re-stated March’s results, which had overstated the seasonal adjustment for an earlier Easter in 2023.

“We already knew that April’s retail sales were likely to disappoint following the continued wet weather experienced across the UK. Indeed footfall fell by 7% last month according to the BRC, and this was also reflected in slightly higher penetration of online retail, growing from 26.2% in March to 26.5%.

“The hardest hit category by far was fashion, with a 10% decline in sales volumes compared with last April. Many retailers struggled to shift new season’s spring-summer lines especially given the unseasonal weather. However, every category saw sales declines in both volume and value terms - even grocery, where the number of pounds in the till are no longer being flattered by inflation as price rises slow.

“For consumers overall, we know from our consumer sentiment survey that household finances have already benefited from lower grocery price inflation and higher wages and the National Insurance cuts earlier in the year. While the effect will be magnified in April’s pay packets, they have also had to contend with April price increases in areas such as mobile phone, TV subscriptions, and hospitality and leisure.

“So, while we remain optimistic about a recovery later in the year, the conflicting factors of higher incomes and lower food and energy prices on the one hand, versus higher services inflation and delays to interest rate cuts on the other, suggest that retailers are not out of the woods yet.

“In the short term, 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.”