UK Shoppers Pause For Breath In April After Surge In Spending

By Donna Ahern
UK Shoppers Pause For Breath In April After Surge In Spending

British shoppers paused for breath in April after months of strong buying, according to official data that showed continued underlying strength of consumer spending during the Brexit crisis.

Monthly retail sales volumes were flat last month, the Office for National Statistics said, stronger than a median forecast for a 0.3% decline in a Reuters poll of economists.

During the three months to April, sales increased 1.8%, the fastest growth by this measure since August last year.

A Bright Spot

Consumer spending has been a bright spot for Britain's economy ahead of Brexit, contrasting with businesses cutting back on investment throughout last year and slower global economic growth.

Britain was originally due to leave the European Union on 29 March but that deadline has been pushed back to 31 October as Prime Minister Theresa May failed to break an impasse in parliament on the terms of Brexit.


May said on Friday she would resign as Conservative Party leader on 7 June, paving the way for a new prime minister to try to take Britain out of the EU.

Consumers are gloomy about the outlook for the economy, according to surveys.

But strong job creation and rising pay growth have boosted their spending power, even if wages remain lower than before the financial crisis once adjusted for inflation.

A Record Quarter

"Retail growth was strong in the three months to April with a record quarter for the online sector, driven mainly by clothing purchases, with warmer weather boosting sales," ONS statistician Rhian Murphy said.

"Elsewhere, department stores continued to see their sales fall."


The contrast between strong growth in online sales and the problems of high street retailers underscored the fundamental shifts taking place in the industry, Duncan Brewer, retail partner at consultants Oliver Wyman, said.

'Rise Of New Businesses'

"Retail used to be simple: consumers went to stores, browsed products, then bought what they wanted," he added.

"Now, attracting consumer spending has become all the more competitive with the rise of new businesses, both big and small, which are successfully reaching new consumers online."

Bricks-and-mortar stores hoping to survive would have to offer the kind of service that customers cannot get online, Brewer said.

Compared with April 2018, total retail sales were up by 5.2% after a 6.7% annual rise in March, better than expected in the Reuters poll.


Retailers themselves have reported mixed fortunes this month.

Morrisons, Britain's No. 4 grocer, missed quarterly growth forecasts, blaming political and economic uncertainty and No. 3 player Asda warned of an "increasingly challenging backdrop".

However, discounter B&M said it enjoyed its best ever Easter trading season.

News by Reuters, edited by Donna Ahern Checkout. Click subscribe to sign up for the Checkout print edition.

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