Sun shines on high street but outlook is unsettled

Britain's retailers enjoyed a sales rebound last month as the sun shone on the high street but the outlook remained cloudy as another big name announced dozens of store closures.

UK sales volumes jumped 2.3% last month, but rising inflation is putting the squeeze on consumers. Picture: Ian Georgeson
UK sales volumes jumped 2.3% last month, but rising inflation is putting the squeeze on consumers. Picture: Ian Georgeson

Official figures revealed that sales volumes across the UK jumped 2.3 per cent in April compared with the month before – up 4 per cent on a year-on-year basis. Both results were much stronger than economists had anticipated and were aided by the good weather.

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Last month’s rebound contrasts with March, when sales recorded the biggest fall in seven years.

The Office for National Statistics (ONS) said: “Anecdotal evidence from retailers suggests that good weather contributed to growth.”

On a rolling three-month basis, which partially removes single month fluctuations, sales volumes also picked up slightly. Due to the recent uptick in inflation, the overall amount spent in shops and online was 6.2 per cent higher in the three months to April compared with a year ago – the biggest rise in 15 years.

Euan Murray, relationship director, Barclays corporate banking, Scotland, said the later Easter this year as well as the improvement in the weather would have boosted footfall.

“Although these factors will certainly have contributed, the scale of the increase has perhaps exceeded even the most optimistic expectations, and this really is a great result for the sector,” he noted.

“The good news will come as welcome relief for retailers contending with a range of challenges at the moment, from continued cost pressures in part linked to the pound’s relative weakness, to consumers being more reluctant to part with their cash for big-ticket items.”

IHS Markit economist Howard Archer said: “The squeeze on consumers looks highly likely to tighten further over the coming months as rising inflation eats further into purchasing power with the pressure reinforced by ongoing muted earnings growth.”

The sales data came as retail stalwart Mothercare warned over a swathe of further high street store closures as it ramps up turnaround efforts.

The chain said it would slash its 152-strong UK store estate further to between 80 and 100 shops as it moves to the “second phase” of an overhaul.

Mothercare has already been axing loss-making shops and refurbishing its estate to boost flagging UK sales, having shut 21 stores in the year to 25 March.

Boss Mark Newton-Jones said he wants stores to be focused on key locations nationwide, while acting as specialist advice and service points to support online sales.

His turnaround efforts have been helping return the UK arm to health, with the group seeing its first underlying profit for six years in the final half of its financial year – with a surplus of £4.4 million. The UK remained loss-making overall in the year.