PwC Comments On April 2023 ONS Retail Sales Data

29th May 2023

Following the wash out of March's worse-than-expected retail sales, shoppers staged a comeback to high streets in April. Retail sales value and volume both showed an improvement on the previous month, increasing by 1.7% and 0.8% respectively excluding petrol following March’s decline.

With inflation still stubbornly high, consumers are still getting less for their money compared with last year: while sales values grew by 7% excluding petrol, volumes are still 2.7% lower than last April. However, some of the slowdown in energy price inflation seems to have made it back to the high street, with almost every other measure of retail sales in positive territory.

March’s slowdown was a result of specific factors, as predicted, and all of these have reversed: grocery sales volumes normalised as fresh food shortages dissipated and shoppers stocked up for family gatherings over Easter and early May’s bank holidays; while fashion, accessories and beauty showed a marked improvement as dryer and warmer weather encouraged sales of new season’s ranges.

Overall, the trajectory remains positive, with the best quarterly improvement in retail sales volumes since August 2021. This echoes the latest measures of consumer sentiment, which has been improving continuously since last Autumn.

With this month’s sales likely to be helped by the Coronation and additional bank holidays, we expect the positive momentum to continue in the short term. However retailers will be hoping that the current green shoots are not dampened by higher interest rates or other macroeconomic challenges over the summer.