Plunge in consumer optimism but sales surprise

RETAIL sales in Great Britain rebounded unexpectedly in April, official figures revealed yesterday, but they remain weak on a longerterm view and consumer confidence has hit an all-time low amid the cost-of-living crisis.

The Office for National Statistics said yesterday that retail sales volumes had risen 1.4 per cent month-on-month in April. A poll of economists by Reuters had indicated an expectation that sales volumes would have fallen by 0.2%. Retail sales volumes declined by 1.2% in March, with the previous estimate of a 1.4% decline having been revised in the latest figures.

However, comparing the February to April period with the preceding three months, retail sales volumes were down 0.3%, and the ONS noted: “This continues the downward trend since summer 2021.”

Food store sales volumes rose 2.8% month-on-month in April. Non-food store sales volumes declined by 0.6%.

Non-store retailing sales volumes rose by 3.7% in April, boosted by demand for clothing. This category is predominantly sales by online retailers.

Gfk’s closely watched UK consumer confidence index, the latest reading for which was published yesterday, dropped by two points to -40 in May, its lowest since records began in 1974.

Joe Staton, client strategy director at GFK, said: “The GFK consumer confidence barometer recorded a headline score of -40 in May, the worst since our records began in 1974. This comes as UK unemployment hits a 50-year low with vacancies outnumbering job-seekers for the first time, and [with] inflation peaking at a 40-year high driven by soaring food and fuel bills. May’s result is one point lower than the previous record [low] set in July 2008 when the headline score plunged to -39. This means consumer confidence is now weaker than in the darkest days of the global banking crisis.”

He added: “Even the Bank of England is pessimistic, with Governor Andrew Bailey this week offering no hope of tackling inflation.”