The reopening of non-essential stores last month has resulted in increased retail spending as UK consumers become more confident about the recovery from the pandemic.
Retail sales in Britain increased by 9,2% in April, faster than expected, official data showed on Friday.
He points out that the reopening of stores in England and Wales on April 12, and in Scotland from April 26, resulted in a spate of spending.
Sales volumes were over 42% higher than a year earlier (or almost 38% if you remove fuel sales), but this is a less useful metric as the UK was strictly on lockdown in April 2020.
But retail sales volumes were around 10% higher than their pre-pandemic levels (as of February 2020).
The ONS reports that, naturally, non-food stores were the source of the surge in purchases.
Clothing store sales have grown by more than 69% as people seize the opportunity to return to chains like Primark (which saw lines of eager shoppers on reopening day).
Spending on gasoline also jumped last month, up more than 10%, with the easing of the lockout encouraging people to get back on the road – although still lower than a year ago.
Spending at grocery stores decreased compared to March as people were once again given the chance to eat in pubs and restaurants.
The ONS explains:
Both value and sales volume increased 9.2% from March 2021, reflecting the impact of reopening all non-essential retail stores in April.
This signaled the continued recovery in the retail sector after 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 with 69.4%, 25.3% and 10.6% respectively.
And with the reopening of Main Street, the market share of online shopping has plummeted:
- All retail sectors reported declining proportions of online sales as brick-and-mortar stores reopened during the month; as a result, the total share of online sales fell to 30.0% in April 2021, from 34.7% in March 2021.
British consumers are the most optimistic since the start of the coronavirus pandemic, another report this morning shows, as the lifting of lockdown restrictions and the rollout of the Covid-19 vaccination reinforces 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, said the director of customer strategy at GfK.
“The nation’s financial mood has rebounded to its pre-foreclosure figure of minus 9 this month, which means confidence has caught up with all the ground lost by COVID-19.”
GFK’s optimism indicator about the economic outlook over the next 12 months jumped 15 percentage points. It also revealed that more consumers are willing to make a major purchase, spending some of the savings accumulated (by some households) during the foreclosure.
Also coming soon
The Flash PMI surveys will show how service sector companies and factories in the UK, Eurozone and US fare this month as economies reopen.
More in Japan, however, the private sector fell into contraction this month as Covid-19 restrictions hit the service sector. In Australia, the PMI declined slightly but still showed rapid growth.
European stock markets are expected to open slightly higher after strong gains on Wall Street last night led by tech stocks. Inflation fears appeared to ease, as the price of oil and US government bond yields both fell yesterday.
Alvin Tan from Royal Bank of Canada Explain:
The growing positive news around the Vienna talks is causing the market to brace for an upturn in Iranian oil exports. Others pointed to the apparent turn in the Baltic Dry index this month, suggesting that global logistics bottlenecks may ease.
This all happened against the backdrop of tightening Chinese politics as well.
- 9am BST: Eurozone flash services PMI for May
- 9:30 am BST: UK flash PMI for May
- 2:45 p.m. BST: US flash PMI for May
- 3 p.m. BST: Eurozone consumer confidence report for May
- 3 p.m. BST: April US Existing Home Sales Data