April showers more gloom on economy
- Published on Wednesday, 09 May 2012 09:17
- Posted by Scott Buckler
UK retail sales values were down 3.3% on a like-for-like basis from April 2011, when they were up 5.2% on a year ago. On a total basis, sales were down 1.0%, against a 6.9% increase in April 2011
Food sales fell back below their year-earlier level, when they had benefited from Easter buying. Record April rainfall and chilly temperatures hit clothing and footwear sales. Though it helped some smaller homewares, big-ticket purchases continued to struggle and were often promotion-led, amid continued consumer caution.
Online (including mail-order and phone) sales of non-food items showed slower growth, though against a relatively strong April 2011. Sales were 9.0% up on a year ago, the weakest since November 2011.
The changing timing of Easter always makes analysis difficult in March and April. This April's comparison is with a very strong April 2011, which included all four days of Easter compared with only two in April 2010.
Stephen Robertson, Director General, British Retail Consortium, said: "The wettest April since records began has put a dampener on retailers' fortunes. Consumer interest in summer fashions and outdoor products was washed away by constant downpours. Sales held up better for food retailers but customers reverted to winter eating habits, with joints of meat and soups back on shopping lists.
It would have been difficult for this April to out-perform April 2011 even with favourable weather, but these numbers are still disappointing. The long Easter weekend was a peak time for many retailers but its position earlier in the month shifted some Easter shopping into March. In addition, April last year was boosted by the Royal Wedding and the accompanying extra day-off for people to shop or celebrate. Retailers are keeping everything crossed that a 2012 feel-good factor from this summer's events kicks in soon.
Consumers, struggling to balance their household budgets, remain reluctant to spend unless they really have to and the weakening economy is likely to mean people are even more cautious about their finances. With any significant improvement in the difficult underlying conditions a long way off, a lift in the public mood would at least give retailers a short-term boost."
Helen Dickinson, Head of Retail, KPMG, said: "April sales were always going to struggle against the very strong sales figures seen in April 2011, which benefited from the late Easter and glorious weather. Anything other than chilly winds and showers seems a distant memory for consumers and this sums up the mood of many retailers. The food sector had a tough month in comparison with recent trends but still outperformed non-food. The clothing sector was the hardest hit.
"Taking April and March together, like-for-like sales are in negative territory and any growth in total sales is coming from inflation. The sector is undergoing structural change as our desire to consume ever increasing volumes of goods diminishes and technological advances continue to change the way we shop. While May will certainly be brighter than April, the health of the retail sector continues on a downward trajectory."