SALES in retail grew by a meagre 0.5 per cent in the year between April 2012 and April 2013, according to the Office for National Statistics. The volume of sales actually contracted by 1.3 per cent between March and April this year.
Yesterday’s bulletin, which is based on a survey of 5,000 retailers suggested that lower spending on food had driven the contraction in April. The quantity of food bought in the UK is now at its lowest point for ten years.
Excluding fuel, the volume of transactions was effectively stagnant, rising by a negligible 0.2 per cent from its position twelve months earlier.
The British Retail Consortium (BRC) said that the overall picture for April was a little better than the dreary data suggested, as poor weather had impacted the first half of the month. In 2012, The Easter bank holiday was in March rather than April, skewing figures.
Helen Dickinson, BRC director general added: “April this year didn’t benefit from an Easter boost as in 2012, so sales look weak by comparison”. As temperatures rose over the month, demand for new season clothing rose notably.
Philip Shaw, an analyst for Investec was unconvinced by the climate-based explanation. He explained: “The weather seems to have been colder than usual for over a year now, so we are becoming less convinced with this reasoning”.
He added that the decline in spending on food added up to £385m, which was unusually high to have been caused by cooler temperatures alone.
Sterling fell sharply after the figures were announced, dipping 0.7 per cent against the dollar, to below $1.51 for the first time since early April.
Last week, the Office for National Statistics showed that real wages were declining as inflation outstripped pay increases, which would be likely to have a negative effect on household demand, contributing to lower spending.