Retail sales volumes (quantity bought) fell by 2.3% in April 2024, following a fall of 0.2% in March 2024 (revised from 0.0%), the latest figures from the Office for National Statistics (ONS) reveal.
Sales volumes fell across most sectors, with clothing retailers, sports equipment, games and toys stores, and furniture stores doing badly as poor weather reduced footfall.
More broadly, sales volumes rose by 0.7% in the three months to April 2024 when compared with the previous three months, following a poor December 2023, and fell by 0.8% when compared with the three months to April 2023.
Oliver Vernon-Harcourt, head of retail at Deloitte, said: “April’s retail sales were more disappointing than expected, once again being dampened by wet weather, deterring shoppers from the high street and impacting the sale of seasonal items. Though consumer confidence continues to rise, many remain apprehensive and are not yet loosening their purse strings, especially on non-essential items and goods such as clothing and footwear.
“Consumers are focused on value, with the likes of own-label food remaining resilient. Overall, this is a clear sign that, despite inflation easing, retailers’ road to recovery will require them to continue to invest into product ranges that target consumers of all budgets.
“Summer is on the horizon, and with major sporting and entertainment events in the calendar, and the prospect of improved economic conditions to come, we would expect that this optimism filters through into increased spending and a more stable retail sector.”
Stuart Chalmers, retail industry lead, Accenture in the UK and Ireland, said: “In stark contrast to last April, when bank holidays and warm weather saw shoppers out in full force, retailers have been dealt another blow after last month’s fall in sales. Due to poor weather, sales fell across most retail sectors, including clothing, toys and furniture.”
“Businesses must hope that May can reignite spending ahead of summer. Despite some promising inflation data, it may take time to see this filter through to consumer sentiment. In the meantime, price remains a crucial factor behind purchase decisions for consumers. As we head into summer, traditionally a time for higher spending, retailers will have to carefully consider how they adapt their pricing and marketing strategies to highlight how their offer represents good value to shoppers.”
Silvia Rindone, EY UK&I retail lead, comments: The latest UK Retail ONS statistics for April reveal a complex picture of the retail landscape. Poor weather throughout the month discouraged shoppers from venturing out, leading to a dampening of retail sales which fell 2.3% with the most significant fall seen in clothing and sports equipment categories. Non-food store sales also experienced a substantial fall of 4.1%, marking the steepest decline since January 2021, a record that was matched in December 2023. Similarly, the amount spent online during April fell by 1.2%.
“While many households are starting to see a rise in disposable income, caution remains. The lingering economic uncertainty has led to a conservative approach to spending, with consumers saving for unforeseen challenges rather than indulging in immediate gratification, particularly on higher-priced items.
“Positive sentiment does not translate to more shopping, at least not in April. Consumers need to feel the impact on their finances before there in an uptake in sales. As the strain on disposable income eases, this will translate into increased consumer spending throughout the year. Retailers must capitalise on this potential upswing as we approach the warmer months, which could help mitigate new financial burdens such as higher business rates and the increased national living wage.
“We are now seeing a growing divide between retailers who give customers good reasons to spend and those who fail to offer great customer service or lack clear focus by trying to appeal to everyone with specialisation. This differentiation is increasingly important as consumers become more discerning, recognising that value for money extends beyond cost considerations.
Bogdan Toma, partner at McKinsey & Company, comments: “Retail sales were as gloomy as the weather in April. An early Easter and persistent wet weather washed away demand. It’s clear there is a lag between inflation softening and sales volumes picking up. But if inflation continues its downward trajectory, we may see that translate into greater consumer confidence and lead to selective volume recovery in some retail categories.
“In the past three months, the retail volume decline is no longer accompanied by sales value increase, as consumer prices have stabilised. The combination of soft volumes and flat-down sales is a new challenge for retailers to work with, while continuing to manage higher costs, e.g., labour and energy, compared to 12-18 months ago.
“Sales volumes in clothing and footwear stores were particularly hard-hit, with somewhat softer decline in online sales for this category, reflecting a sector challenge that fashion retailers have been working through since the inflationary period has started. Although department stores fared slightly better, turning around from previous months with mildly positive volumes driven by store sales, demand remains volatile with core categories like fashion and furniture in decline.
“As we move towards the summer, retailers are thoughtfully walking the fine balance between optimism in volume recovery with inflation softening, and the reality of the volatility of demand. Forecasting in this environment may prove particularly challenging for most retailers and their suppliers.
“But it is a challenging environment for retailers to accurately forecast future demand. After nearly three years of inflation, lingering concerns about the economy are likely to continue affecting spending habits. Retailers should consider focusing on finding ways to provide value by carefully co-ordinating areas like loyalty, pricing and promotions to appeal to cautious customers.”
