UK client spending grew at about half the tempo of inflation in April as fast-rising costs continued to suppress demand, even because the leisure sector noticed some “renewed momentum”, in keeping with new sector information.
The worth of retail gross sales elevated 5.2 per cent within the yr to April, in keeping with figures compiled by KPMG and revealed on Tuesday by the British Retail Consortium commerce physique. This compares with March’s headline inflation determine of 10.1 per cent.
Helen Dickinson, chief government on the BRC, mentioned that inflation had saved “volumes . . . down for both food and non-food as customers continued to adjust spending habits”.
Shoppers have been spending extra in shops whereas getting much less since costs began surging in 2021. In March, gross sales values had been up 16 per cent from February 2020, earlier than the pandemic, whereas volumes had been down 0.8 per cent, in keeping with the most recent official information.
Paul Martin, head of retail at KPMG, mentioned that retailers can be hoping that the coronation of King Charles III, the three financial institution holidays in May and indicators that inflationary pressures had been easing would enhance client confidence considerably “enough to start to see real, profitable growth”.
The BRC figures chime with client spending information tracked by Barclays, the funds firm, which displays virtually half of all UK credit score and debit card transactions.
Those figures, which not like the BRC information contains providers akin to eating places and bars, confirmed spending rose 4.3 per cent final month.
Abbas Khan, UK economist at Barclays, mentioned that whereas excessive inflation continues to squeeze actual family disposable incomes and constrain consumption, “the data suggests that pockets of the economy, particularly the leisure sector, enjoyed some renewed momentum in April”.
Spending on utility payments was up 34 per cent yr on yr, reflecting the surge in power costs. As a outcome, many households needed to lower different purchases, akin to groceries, the place gross sales rose 5.5 per cent, effectively beneath the meals inflation working at almost 20 per cent.
However, spending on leisure registered a “sizeable” 12 per cent annual progress in April, in keeping with Barclays, which it attributed to low ranges in the identical month final yr when Covid-19 was nonetheless hampering demand.
Britons additionally booked extra holidays with spending on airline tickets rising 32.1 per cent in contrast with the identical month final yr, an acceleration from the 28.5 per cent progress registered in March.