UK retail sales drop 1.7% in April 2022 as inflation rises: BRC

On a total basis, sales decreased by 0.3 per cent in April, against an increase of 51.1 per cent in April 2021. This is below the 3-month average growth of 3.2 per cent and the 12-month average growth of 6.4 per cent. On a three-year basis (Yo3Y), total retail sales grew 3.9 per cent during April compared with the same month in 2019, BRC said in a media release.

Over the three-months to April, non-food retail sales increased by 1.8 per cent on a like-for-like basis and 6.9 per cent on a total basis. This is below the 12-month total average growth of 11.1 per cent. For the month of April, non-food was in decline year-on-year.

Over the three months to April, in-store sales of non-food items grew 59.3 per cent on a total basis and 45.8 per cent on a like-for-like basis. This was an improvement on the total 12-month average growth of 50.2 per cent. On a three-year comparison, over the three months to March, in-store sales of non-food items declined 48.2 per cent (Yo3Y) on a total basis since March 2019, BRC said.

Online non-food sales decreased by 13.9 per cent during April, compared with growth of 11.3 per cent in April 2021. This is better than the 3-month decline of 24.1 per cent. On a three-year comparison, online non-food sales increased by 51.4 per cent (Yo3Y) in April. This is above the 3-month average increase of 41.6 per cent. Non-food online penetration rate decreased to 38.6 per cent in April from 45.1 per cent in April 2021. However, it was up 15.2 percentage points on the 29.9 per cent seen at the same point in 2019.

Helen Dickinson OBE, chief executive, BRC, said: “The rising cost of living has crushed consumer confidence and put the brakes on consumer spending. Sales growth has been slowing since January, though the real extent of this decline has been masked by rising inflation. Meanwhile, thanks to the April sunshine, garden goods and fashion saw stronger sales, particularly occasionwear as consumers prepared for summer and this year’s wedding season.

“Customers face a difficult year; with the Bank of England predicting inflation to reach more than 10 per cent. Retailers are experiencing higher costs as a result of rising commodity prices, transport costs, labour shortages, delays at ports, and the war in Ukraine. Further headwinds are incoming, such as rising global food prices, which rose 13 per cent between March and April. Retailers will continue to do all they can to mitigate the effects of these costs rises, but unfortunately they cannot absorb them all.”

Paul Martin, UK head of retail at KPMG, said: “Sales of clothes and footwear continued to see growth on the high street and online, but conscientious consumers curbed unnecessary spending with technology and items for the home bearing the brunt of spending cutbacks.

“With interest rates and inflation rising and the Bank of England warning of a possible recession, the squeeze on disposable household income is starting to have an impact on the high street.  Against a backdrop of falling consumer confidence, the retail sector has a bumpy time ahead as they face spiraling cost pressures from all directions. Many retailers will have no choice but to raise prices to protect margins, but the longer we see high inflation and real household incomes falling, the more likely it is that consumers will change their spending behaviour, prompting a decline in the health of the retail sector and possibly more casualties on the high street.”

Fibre2Fashion News Desk (KD)