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The reopening of non-essential stores last month has led to a surge in retail spending, as UK consumers grow more confident about the recovery from the pandemic.
Retail sales surged by 9.2% in April, faster than expected, official data showed on Friday.
It highlights that the reopening of stores in England and Wales on 12 April, and in Scotland from 26 April, uncorked a rush of spending.
Sales volumes were over 42% higher than a year earlier (or nearly 38% if you strip out fuel sales), but that’s a less useful measure as the UK was in a strict lockdown in April 2020.
But retail sales volumes were around 10% higher than their pre-pandemic levels (in February 2020).
The ONS reports that, understandably, non-food stores drove the surge in shopping.
Clothing store sales were up more than 69%, as people seize the opportunity to get back into chains such as Primark (which saw queues of keen shoppers on reopening day).
Spending on petrol also jumped last month, up more than 10%, with the easing of lockdown encouraging people to hit the road again – although it’s still lower than a year ago.
Spending at food stores dipped compared to March, as people had the chance to eat out in pubs and restaurants again.
The ONS explains:
The value and volume of sales were both up 9.2% when compared with March 2021 reflecting the impact of the re-opening of all non-essential retail stores in April.
This signalled continued recovery in the retail sector following the growth in March (5.1%) and February (1.8%). The strongest monthly growth in April 2021 came from clothing stores, other non-food stores and automotive fuel retailers of 69.4%, 25.3% and 10.6% respectively.
And with the high street reopened, online shopping’s share of the market dipped:
- All retail sectors reported a fall in their proportions of online sales as physical stores re-opened during the month; as a consequence, the total proportion of sales online decreased to 30.0% in April 2021, down from 34.7% in March 2021.
British consumers are their most upbeat since the start of the coronavirus pandemic, another report this morning shows, as the lifting of lockdown restrictions and the Covid-19 vaccination rollouts boosts optimism about the economy.
The GfK Consumer Confidence Index improved to -9 in May from -15 in April, the highest since March 2020 — just before the first lockdown.
Joe Staton, client strategy director at GfK, said.
“The financial mood of the nation has bounced back to its pre-lockdown figure of minus 9 this month, meaning confidence has made up all the ground lost to COVID-19”.
GFK’s gauge of optimism about the economic outlook over the next 12 months jumped by 15 percentage points. It also found that more consumers are willing to make a major purchase, spending some of the savings accrued (by some households) in the lockdown.
Also coming up
Flash PMI surveys will show how service sector companies and factories in the UK, the eurozone, and the US are faring this month as economies reopen.
Over in Japan, though, the private sector has fallen into contraction this month as Covid-19 restrictions hit the service sector. In Australia, the PMI dipped slightly but still showed rapid growth.
European stock markets are expected to open slightly higher, after solid gains on Wall Street last night led by tech stocks. Inflation worries seemed to ebb, with the oil price and US government bond yields both dipping yesterday.
Alvin Tan of Royal Bank of Canada explains:
The growing positive news around the Vienna talks have the market girding for a resumption of Iranian oil exports. Others have pointed to the apparent turn in the Baltic Dry Index this month, suggesting that global logistics bottlenecks may be easing.
All this has also been happening amid the backdrop of Chinese policy tightening.
- 9am BST: Eurozone flash service PMIs for May
- 9.30am BST: UK flash PMIs for May
- 2.45pm BST: US flash PMIs for May
- 3pm BST: Euro area consumer confidence report for May
- 3pm BST: US existing home sales data in April