Retail sales fell off a cliff in April, according to new data from the British Retail Consortium , in a fresh sign that UK shoppers are tightening their purse strings.
Sales dropped by 3.1 per cent compared with April last year, the sharpest decline recorded by the BRC and KPMG since they began monitoring retail performance in 1995.
While the figure for last month was affected by the early timing of Easter this year - with shoppers doing more buying in March, ahead of the spring holiday - economists still deemed the data a “weak report”.
“It is extremely rare for total sales to fall outright; December 2008 was the last time our calendar-adjusted measure of total sales fell for two consecutive months,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
“Continued weakness in sales in April can’t be pinned on the weather - average temperatures actually were 1.1 degrees celsius above their 1970-2017 April average - or any other one-offs.”
Helen Dickinson, chief executive of the BRC, said consumers' discretionary spending power remains under pressure and added: “The reality is, that with only a gradual return to solid growth in real incomes expected, the market environment is likely to remain extremely challenging for most retailers."
However, Mr Tombs warned: “The widely anticipated revival in growth in consumers’ spending is not emerging this year. While wages are no longer falling in real terms, households’ incomes were hit in April by another round of austerity measures and a rise in minimum pension contributions.
“In addition, the rise in (interest rates) in November has prompted households to take a more cautious approach to borrowing and has hit the housing market hard, depressing consumers’ confidence.”
Pantheon Macroeconomics is predicting that households’ real spending growth will slow to 0.8 per cent in 2018, down from 1.7 per cent last year.
