British retail sales plunge 2.3% in April, missing estimates - CNBC

People walk in the rain over the London Bridge in central London, March 12, 2024.

Lucy North - Pa Images | Pa Images | Getty Images

LONDON — U.K. retail sales volumes dropped 2.3% in April as wet weather deterred shoppers, the Office for National Statistics said Friday.

Economists polled by Reuters expected a smaller fall of 0.4%.

"Sales volumes fell across most sectors, with clothing retailers, sports equipment, games and toys stores, and furniture stores doing badly as poor weather reduced footfall," the ONS said. March's figure was revised from flat to a 0.2% decline.

Sales were up 0.7% across the three months to April compared with the previous three months following a weak December and holiday season, but were down 0.8% year-on-year.

Kris Hamer, director of insight at the British Retail Consortium, pointed to bright spots in the data in cosmetics and computer sales.

"With summer around the corner, and inflation fast approaching the Bank of England's 2% target, retailers are hopeful that consumer confidence will improve, and spending will pick up once again," Hamer said in a note.

Consumer confidence did improve in May across both personal finances and the outlook on the wider economy, according to a survey released by GfK on Friday.

Headline inflation in the U.K. cooled to 2.3% in April from 3.2%, figures published Wednesday showed. However, stickiness in core and services inflation led markets to push back bets for the first BOE interest rate cut from June to August or September.

Phil Monkhouse, U.K. country manager at financial services firm Ebury, said the surprise General Election announced this week for July 4 might add "fresh uncertainty" into the minds of consumers who are already dealing with higher interest rates.

"Preparing for the warmer weather, ensuring ready access to finance and putting in place hedging arrangements will be essential for retailers wanting to ride out any future sales volatility," Monkhouse said.

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2024-05-24 07:28:38Z
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