Retail sales better than expected in April but disappoint in May, reports show

By

Sandra Halliday

Published
May 26, 2023

The end of the week has seen two alternative views of UK retail being released with official figures for April proving better than expected, but the latest CBI report for May suggesting disappointing turnover in recent weeks.

Looking at the official Office for National Statistics figures first, retail sales volumes are estimated to have risen by 0.5% in April month on month, following a fall of 1.2% in March 2023. That's not exactly stunning but this was better than expected, although they fell 3% against a year ago.

Value-wise, they rose 1.1% on the month and 4.7% on the year, driven by inflation.

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Non-food stores volumes rose by 1% month on month, following a fall of 1.8% in March when poor weather conditions affected sales. Within this, the sub-sector of ‘other’ non-food stores reported a monthly rise in sales volumes of 2.1% because of strong sales in watches & jewellery and sports equipment stores. Department stores sales volumes rose by 1.7% following a fall of 3% in March. And clothing stores sales volumes rose by 0.2%.

Non-store (mainly online retailers) sales volumes rose by 0.2% month on month after a fall of 1.4% in March. By value, e-tailers rose 1.5% against March and 1.3% against a year ago.

Textile, clothing and footwear e-stores were up 0.2% by value month on month and and up 4.5% against a year earlier. 

But so far May doesn’t seem encouraging. Looking at this month via the latest Confederation of British Industry (CBI) monthly distributive trades index, sales have declined after a small rise in April.

The index fell to -10 in May from +5 in the previous month. Those plus and minus figures aren’t about higher or lower actual sales. Instead they represent the weighted difference between the percentage of retailers reporting an increase and those reporting a decrease, so more retailers are looking at weaker performances for this month. 

Against the backdrop of poor sales and acute price pressures, retailers also reported that headcount in the year to May declined at the quickest rate since February 2009. Investment intentions also deteriorated to the greatest extent since May 2020. 

Yet there’s some good news here as well with stores expecting sales volumes to stabilise in June on the back of higher consumer confidence and as energy prices fall.

Price growth in the year to May also remained near multi-decade highs (+77% from +80% in February). Next month, prices are expected to increase at this rapid pace again (+76%).