Summer clothing and booze give lift to UK sales but outlook bleak amid spending squeeze

Sales of alcohol, tobacco and summer clothes helped to underpin an increase for UK retailers last month, despite many being forced to hike their prices.

Customers flocked to supermarkets to buy more alcoholic drinks, sweet treats and cigarettes, but spent less in non-food shops.

The UK’s retail sector booked a 1.4 per cent rise in sales over the month, after contracting in March, new figures from the Office for National Statistics (ONS) show.

Heather Bovill, deputy director for surveys and economic indicators, said: “Retail sales picked up in April after [March’s] fall. However, these figures still show a continued longer term downward trend.

“April’s rise was driven by an increase in supermarket sales, led by alcohol and tobacco and sweet treats, with off-licences also reporting a boost, possibly due to people staying in more to save money.

“Clothing sales had a strong month, especially online, with some retailers suggesting consumers were purchasing clothes for summer holidays and weddings.

“The proportion of online sales crept up a little, but despite this increase have predominantly fallen since their peak in early 2021, although they remain well above pre-pandemic levels.”

The monthly rise did not stop a 0.3 per cent drop over the three months to April, but comes in the face of rising prices.

The latest ONS figures for the whole of the UK follow the April sales monitor from the Scottish Retail Consortium. Picture: Jane Barlow/PA

The most recent inflation figures showed a massive spike in the cost of living, especially in April as energy bills spiked.

Thomas Pugh, economist at business services group RSM UK, said: “The [month-on-month] rise in retail sales volumes suggests that consumers are not as pessimistic as the huge slump in consumer confidence to a 50-year low would imply.

“While this could just be a one-off bounce back after a sharp contraction in March, it does give us confidence in our view that consumer spending will help the UK to narrowly avoid a recession.

“However, there is worse to come over the rest of the year as the cost-of-living crisis is likely to worsen in Q4, with further rises in energy bills and food bills.”

Myron Jobson, senior personal finance analyst at Interactive Investor, added: “The outlook for consumer confidence is bleak. We now know how the rise in the energy price cap at the start of April, the rise in national insurance contributions and the freezing of various tax thresholds and allowance is going to hit our wallets.”

The ONS figures come just days after the latest snapshot from the Scottish Retail Consortium revealed a fall in sales last month, compared with pre-pandemic levels.

Releasing its latest sales monitor, the trade body said total sales by value had dipped by 0.5 per cent last month, compared with April 2019.

SRC director David Lonsdale said: “The retail recovery is still very much in its infancy and the outlook has to be tempered in light of the pressures on consumer spending. Household finances are under strain as inflation, tax rises and other bills take a bite out of shoppers’ purses and wallets.

“Disposable incomes simply do not stretch as far as they used to, presenting Scotland’s retailers with a more challenging marketplace.”