April retail sales suffer unexpected 1.3% monthly fall

UK retail sales volumes tumbled by 1.3% month-onmonth in April, according to official figures which wrongfooted the City and underlined the c o n t i nui n g weakness of the economy.

The seasonally adjusted drop in sales volumes, reported yesterday by the Office for National Statistics, contrasted with economists’ consensus forecast of a flat position. It followed a 0.6% drop in retail sales in March, although volumes had jumped by 2.1% in February after a decline of 0.7% in January.

Food sales were particularly weak in April, with volumes in this category down 4.1% month-on-month. This was t he steepest monthly fall in food sales since May 2011. Non-food sales rose by 1.9% month-onmonth in April, having dropped by 3.5% in March.

Howard Archer, chief UK economist at consultancy IHS Global Insight, said: “Much of the latest news on the UK economy has been relatively encouraging but, even allowing for the negative impact of ongoing cold weather and the fact that Easter occurred in March this year, April’s marked drop in retail sales provides a reminder that the economy is not yet out of the woods and still has a challenging job to develop sustained, clear growth.”

S a muel To mbs, UK economist at consultancy Capital Economics, believed that the 1.3% drop in retail sales in April suggested that the recovery in high street spending at the start of the year had begun to fade.

He s a i d: “Following March’s drop, sales volumes have slipped back roughly to their level seen before February’s chunky 2% rise.”

Mr Tombs noted that the decline had been led by a

RETAIL SALES

“whopping” 4% drop in sales at food stores.

He said: “According to supermarkets, the bad weather in April hindered sales of their spring and summer ranges, including barbecues and garden furniture.”

However, Mr Tombs added: “April’s average temperature was only a smidgen below its historical average, hinting that some of the decline in food store sales may reflect other factors too, such as the recent pick-up in food price inflation.

“What’s more, sales of clothing, household goods and in department stores all failed to bounce back from their sharp falls in March. Accordingly, we would not bank on an imminent reversal of April’s drop in retail sales volumes.”

The ONSfigures show that sales volumes in the nonspecialised category, which includes department stores, rose by 2% month-on-month in April, having fallen by 3.4% in March. Sales by textiles, clothing and footwear stores rose by 0.8% in April, having dropped by 3.4% in March.

A s ur vey p ubl i s hed yesterday by the Confederation of British Industry showed that UK manufacturers’ output volumes were broadly flat over the three months to May, defying firms’ hopes of a strong increase. But manufacturers were hopeful of a significant increase over the coming three months.