April Retail Sales See Uptick
A first estimate of retail sales for April 2023 suggests a promising 0.5% increase in sales volumes. This modest growth follows a 1.2% decrease recorded in March 2023. Compared to the preceding three months, sales volumes have risen by 0.8%, marking the highest growth rate since August 2021. This trend offers a glimmer of optimism to UK retailers, who have been grappling with the economic fallout of the pandemic and challenging weather conditions.
Non-Food and Online Retailers Rebound
April’s increase in sales volumes is primarily driven by non-food stores and online retailers. Non-food stores, which include jewellers and sports equipment stores, saw a 1.0% rise in sales volumes following a dip in March due to unfavourable weather. Online retail sales also witnessed a 0.2% uptick following a 1.4% decrease in March. Interestingly, the proportion of online sales remained static at 26.0%, signalling a trend that appears to be a lasting shift in consumer behaviour post-pandemic.
Notable Growth in Jewellery and Sports Equipment Sales
The sub-sector of non-food stores, specifically jewellers and sports equipment stores, experienced a notable increase in sales volumes of 2.1% in April. This recovery was also observed in department stores, with sales volumes increasing by 1.7% following a 3.0% decrease in March.
Grant Fitzner, the Chief Economist at the Office for National Statistics (ONS), reflected on this trend, stating, “Retail sales grew, partially rebounding from a poor weather-affected March, with jewellers, sports retailers and department stores all having a good month.”
The Weather Factor
The UK Met Office reported that March 2023 was the sixth wettest March on record, with rainfall 155% above the monthly average. This severe weather condition significantly impacted retail sales, with shoppers holding back on their spending. However, with the weather returning to average levels in April, retail sales saw an immediate bounce back, signalling a potentially strong summer for retailers.
Anticipating a Summer of Success
Despite the high cost of living impacting household budgets, retailers are hopeful for an upswing in sales as we enter the summer months. “Sales should improve further as we enter the summer months, especially with inflation starting to ease and consumer confidence slowly stabilising,” said Helen Dickinson, Chief Executive of the British Retail Consortium.
This optimism is shared across the jewellery sector, which is set to benefit from the overall retail sales recovery. The data from the ONS show signs of potential high-street momentum, which could drive economic recovery in the wider UK retail industry.
However, retailers remain cautious. “Uncertainty about what this means for the average shopper has meant many are continuing to keep a tight grip on their finances. Consumers are continuing to make more considered decisions about how they spend their money, which, when combined with persistently high price inflation, is creating a challenging environment for retailers,” said Silvia Rindone, EY UK and Ireland retail lead.
Key takeaway: the ongoing recovery in the retail sector, particularly for non-food stores like jewellers, is promising. As we approach the summer months, this rebound in consumer confidence could signify an optimistic turning point for UK jewellers and the broader retail industry. However, retailers must remain aware of the wider economic factors at play, and the potential impact they could have on consumer behaviour and spending patterns.