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(Alliance News) - UK retail sales fared better-than-hoped in April against a backdrop of weakening consumer confidence, data showed on Friday.
Retail sales volumes rose 1.4% in April on a month before, figures from the Office for National Statistics showed, reversing a month-on-month fall of 1.2% in March. This was driven by food store sales, which rose 2.8%, largely due to higher spending on alcohol, tobacco and confectionery in supermarkets.
Consensus, according to FXStreet, had anticipated a decline of 0.2% in April.
Heather Bovill, deputy director for Surveys & Economic Indicators at the ONS, noted that along with an uplift for supermarkets, off-licenses also reported a boost, ‘possibly due to people staying in more to save money’.
While retail sales picked up in April, she cautioned that the figures ‘still show a continued longer term downward trend’.
Year-on-year, sales tumbled 4.9% in April, after growth of 1.3% in March. However, this was not as bad as the 7.2% drop forecast by analysts.
Sales in the three-month period to April fell by 0.3% when compared with the previous three months, continuing the downward trend since summer 2021.
In a separate release, GfK said its long-running UK consumer confidence monitor dropped by two points to minus 40 in May, the lowest score since records began in 1974.
‘May's result is one point lower than the previous record 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, the impact of Brexit on the economy, or the Covid shutdown,’ said Joe Staton, client strategy director at GfK.
In May 2021, the figure stood at just minus 9.
The index measuring the personal financial situation over the last 12 months dropped three points to minus 22 and the major purchase index also dropped by three points, to minus 35.
‘Even the Bank of England is pessimistic, with Governor Andrew Bailey this week offering no hope of tackling inflation,’ said GfK's Staton. ‘The outlook for consumer confidence is gloomy, and nothing on the economic horizon shows a reason for optimism any time soon.’
By Lucy Heming; lucyheming@alliancenews.com
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