24 May 2018

April retail sales “hop” fuelled by fuel

Small growth in this morning’s retail sales for April 2018 gave hope to a spring bounceback. But there was disappointment behind the figures as fuel price increases propped up sales volumes in other sectors.

The key findings from the Retail Statistics showed:

  • In April 2018, the quantity of goods bought in the retail industry remained relatively flat with a slight increase of 0.1% in the three-month on three-month movement.
  • When compared with March 2018, the quantity bought in April increased by 1.6% as all sectors, excluding department stores, recovered from the declines seen in March.
  • Department stores showed a different monthly picture to all other sectors as the only sector to report a fall in quantities bought, at negative 0.9% in April following strong online sales in March.
  • Petrol sales reported the largest recovery in April, with a growth of 4.7% compared with a decline of negative 6.9% in the previous month as road closures affected travel in March.
  • Removing the monthly volatility, the combined two months of March and April compared with the same periods a year earlier showed a general slowdown to growth at 1.3% for March and April 2018 when compared with 2.9% for March and April 2017.
  • Online sales as a proportion of all retailing continued to grow year-on-year at 17.3% in April 2018, in comparison with 16.1% in April 2017; with food and clothing stores achieving record online proportions.

Phil Mullis, Partner and Head of Retail and Wholesale at top-20 UK accountancy firm, Wilkins Kennedy, said: “Compared to last year, the retail sales showed a 1.3% growth in sales volume – but looking back two years ago, where growth was 2.9%, you can see that growth has slowed down.

“We also need to consider the figures in some detail. The 1.3% growth has come from an amalgamation on March and April – because of the fall of Easter Sunday this year. Plus, a significant part of that growth came from a rise in fuel prices, all other sectors experienced little or no increase.

“There is no doubt that retail sales are still flat and the news that big retailers are closing down completely, is a reminder of the threat and the changing times.

“However, there could be some good news on the horizon. Inflation fell to 2.4% during April, so it is unlikely that interest rates will rise this year. That will mean less of a squeeze on spending and consumers will have more cash in their pockets. 
“The food and clothing sectors are also seeing record sales figures online. The fashion sector has been leading online sales for a long time, but as we start to see more online retailers, such as Amazon, dabble in the grocery market, there could be further growth to come for online food shopping.

“Looking forward into May, the good weather and Royal Wedding will hopefully bring a much-needed boost to retail sales.”

 

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