UK Retail Sales Volume Rebound in April

UK retail sales grew a little more than expected in April. The broader trend also suggests a slightly brighter picture for consumer spending, notwithstanding still-intense cost of living pressures from high inflation.

The main points from this report were as follows –

• Retail sales volumes rose by 0.5% m/m in April 2023, partly reversing the sharp contraction of 1.2% chalked up in March. The consensus forecast was centred on a rise of 0.3% on the month.

• The headline increase in retail sales volume was predominantly driven by a rise in the volume of goods purchased from non-food stores (e.g. clothing and household goods). They increased by 1.0% in April after a decline of 1.8% in March, when poor weather conditions throughout the month affected sales.

• Food stores sales volumes increased by 0.7% following a monthly decline of 0.8% in March.

• Looking through the month-to-month volatility the trend in UK retail sales appears to have improved. Sales volume rose by 0.3% in the three months to April, from -1.0% in the previous three months.

Overall, the pick-up in today’s retail sales volumes is encouraging and will offer some encouragement to the idea that the UK can avoid a near-term recession.