UK retail sales jump unexpectedly, but big picture bleak

LONDON, Might 20 (Reuters) – British retail gross sales jumped unexpectedly in April as buyers loaded up on alcohol and tobacco, doubtless a blip in an in any other case bleak pattern that has pushed shopper confidence to all-time lows amid a worsening cost-of-living crunch.

Retail gross sales volumes rose 1.4% month on month after a 1.2% drop in March, the Workplace for Nationwide Statistics mentioned. Economists polled by Reuters had anticipated a 0.2% month-to-month fall.

The broader image stays disconcerting. Retail gross sales within the three months to April fell 0.3%, after a 0.7% drop in March. In contrast with a 12 months in the past, gross sales volumes had been 4.9% decrease, marking the largest annual drop since January 2021.

Earlier on Friday, Britain’s longest-running gauge of shopper confidence, the GfK survey, fell to its lowest since data started in 1974. learn extra

British shoppers had been hit final month by a double whammy of surging family power prices and better taxes, and knowledge revealed this week confirmed inflation hit a 40-year excessive of 9.0%.

The Financial institution of England thinks inflation will climb above 10% later this 12 months.

“Thus far, the conflicting indicators coming from the info are according to our name that the UK will stagnate in Q2,” mentioned economists from Berenberg Financial institution.

Sterling was little modified towards the greenback after the info.

The ONS mentioned meals retailer gross sales rose by 2.9% in April, largely pushed by robust gross sales of alcohol, tobacco and ‘candy treats’.

This was “presumably on account of individuals staying in additional to save cash,” ONS statistician Heather Bovill mentioned.

On-line garments gross sales additionally did nicely as individuals received prepared for summer season holidays and weddings, she added.

Main grocery store teams together with Tesco (TSCO.L) and Sainsbury’s (SBRY.L) have warned of decrease earnings this 12 months and Premier Meals (PFD.L), the maker of Mr Kipling truffles and OXO inventory cubes, mentioned it will increase costs of its merchandise.

“Total (the info) will nonetheless go away the BoE in the identical bind, behind the curve on inflation, however fretting over a probably sharp slowdown, above all in shopper spending,” mentioned Marc Ostwald, chief economist at brokerage ADM Investor Companies.

Reporting by Andy Bruce and David Milliken; modifying by William James, John Stonestreet and Toby Chopra

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