Retailers saw sales fall ‘off a cliff’ last month as the earlier timing of Easter added to an already gloomy situation on the High Street, new data show.
Retail sales decreased by 4.2 per cent on a like-for-like basis in April compared to the same month last year, the biggest ever decline since the British Retail Consortium and KPMG records began in 1995.
Last month’s decline compares to a 5.6 per cent increase in April 2016. The report says that both figures were heavily distorted by the timing of Easter.
Sunny spells: Clothing and footwear sales were the only categories to rise in April
This year the festivity fell earlier than usual – on 1 April compared to 16 April last year – meaning most of the spending for the occasion was done in March.
The three-month figure is usually more reliable but even that is below the 3-month and 12-month averages of 0.4 per cent and 1.2 per cent, the report says.
‘April’s figures show retail sales growth falling off a cliff, with sales down 3.1 per cent on last year, but we must exercise caution and remember that the timing of Easter makes meaningful month-on-month comparisons difficult,’ said Paul Martin, head of retail at KPMG.
‘That said, the three-month average is more helpful to assess, but this too points to sales only growing modestly – these are indeed testing times for retailers!’
The sharp decline comes as high street retailers have been suffering falling sales recently.
Some have gone bust – like Maplin and Toys R Us – while others are shutting down sites, with restaurant group Cote becoming the latest diner to be considering closing a handful of restaurants as part of a restructuring plan.
Clothing and footwear sales were the only categories to see a monthly rise, probably thanks to a the first sunny hot days of the year.
‘The first glimpse of summer may have temporarily lifted clothing and footwear, but non-food sales overall continue to be weak,’ British Retail Consortium chief executive Helen Dickinson said.
‘Consumers’ discretionary spending power remains under pressure and the reality is, that with only a gradual return to solid growth in real incomes expected, the market environment is likely to remain extremely challenging for most retailers.’
Non-food sales in the quarter declined by 4.9 per cent on a like-for-like basis, the lowest since this measure began in 2013, while food sales rose by 1.7 per cent.
Meanwhile, separate data from Barclaycard found consumer spending increased by 3.4 per cent year-on-year in April.
Paul Lockstone, managing director at Barclaycard, said: ‘The UK seems to be caught in a holding pattern, with people still budgeting carefully.
‘Looking ahead, uncertainty around interest rates is weighing on the minds of many, with people prepared to cut back on non-essentials in order to cope with a rate rise.’
Greggs has seen its share price slump by 18 per cent as investors fled the stock after the sandwich and pasty retailer admitted it suffered sluggish spring sales due to bad weather.
The retailer said ‘weak customer footfall’ hit its sales over the March and April period, meaning it remained ‘cautious’ about its sales outlook for the rest of the year.
With concerns over future sales and footfall, Greggs said it now expected its full-year underlying profits to remain broadly flat on a year ago rather than a previously flagged improvement.