Latest figures suggest consumers are spending now rather than waiting
Retail sales have showed something of an uplift. The recent figures released by Office for National Statistics (ONS) showed that retail sales rose by 2.3% in April compared to March, while on a year-to-year basis, sales were up by 4% against April 2016.
For card retailers though, while Easter did bring increased sales as the event as a card sending occasion grows, April was generally down compared to March, because of the boost in sales from Mother’s Day.
Mark Janson-Smith, director of Postmark said “I think in our business, these two months are extremely hard to compare against each other as they are so dependent on where the spring seasons fall and historically, perform so differently. With Mother’s Day being so late this year, March was up 25% on last year, yet April was only 4% up. However comparing the two months together, as we normally do due to the holidays our like for like sales were up about 15% on last year so a positive growth for us.”
It was also a good April for Claire Jarvis, co-owner of the Tutbury Present Company in Staffordshire: “April started off very strong for ourselves, but actually slowed down over the last quarter of the month. Overall however, we were up approximately 5% up on last year’s April trading figures.”
The latest figures from the ONS did come as a surprise given the huge rise in inflation seen in the UK since Britain voted to leave the EU last summer, which has generally pushed up prices and depressed shopping activity in the past handful of months.
Following the release of ONS retail sales figures, Dr Felicity Hardley, senior lecturer in marketing and business strategy at Westminster Business School, believes political uncertainty is fuelling a “spend now rather than later” attitude, which has driven the high retail sales figures last month.
“The figures released show a significant recovery in UK retail sales, up 2.3% in April compared to the 1.4% fall in March,” says Dr Hardley. “Consumer decisions to spend are often driven by risk assessment and given that the forecasts for dire consequences for the Brexit vote haven’t yet materialised, consumers are not perhaps as worried as they once were. This means it’s a relatively safe time to spend and the general attitude seems to be that spending now is safer than spending later.”
However, it may just be too early to count your chicks, as a report released by the CBI (Confederation of British Industry) earlier this week showed that in the first half of May, retail sales have flattened out after the bounce in April. The survey also revealed that average selling prices rose at the fastest pace in six years in the year to May.