Online sales growth continued to fall back in April in comparison to the lockdown boom which was passing its peak a year ago. last year, but remains well ahead of pre-pandemic 2019, the latest data suggests. Figures from the BRC, IMRG and Barclaycard show how retail sales in April 2022 compared, variously, to both the same month last year and to the same month in 2019, before the pandemic started.
Last April, non-essential retail opened from the third UK lockdown on April 12.
BRC: retail sales fall year-on-year – with a stronger decline online
Online sales fell by 13.9% in April 2022, a year on from a month in which they grew by 11.3%, according to the BRC-KPMG Retail Sales Index for April 2022. The report suggests that 38.6% of non-food sales took place online, down from 45.1% in April 2021 – but up from the 19.9% of sales that were online in pre-pandemic 2019.
At the same time, total retail sales fell by 0.3% in April compared to last year, when they had grown by 51.1% a year earlier. They were also 3.9% ahead of April 2019. Sales also fell by 1.7% on a like-for-like basis that strips out the effect of store – and business – openings and closures.
“The rising cost of living has crushed consumer confidence and put the brakes on consumer spending,” says Helen Dickinson, chief executive of the British Retail Consortium. “Sales growth has been slowing since January, though the real extent of this decline has been masked by rising inflation. Big ticket items have been hit hardest, as consumers reined in spending on furniture, electricals and other homeware; compounded by delays on goods coming from China. Meanwhile, thanks to the April sunshine, garden goods and fashion saw stronger sales, particularly occasion wear as consumers prepared for summer and this year’s wedding season.
“Customers face a difficult year; with the Bank of England predicting inflation to reach more than 10%. Retailers are experiencing higher costs as a result of rising commodity prices, transport costs, labour shortages, delays at ports, and the war in Ukraine. Further headwinds are incoming, such as rising global food prices, which rose 13% between March and April. Retailers will continue to do all they can to mitigate the effects of these costs rises, but unfortunately they cannot absorb them all.”
In-store sales of non-food items were 59.3% ahead of last year in the three months to April – and 48.2% down compared to March 2019.
Paul Martin, UK head of retail at KPMG, says sales growth went into decline for the first time in 15 months in April. “Sales of clothes and footwear continued to see growth on the high street and online, but conscientious consumers curbed unnecessary spending with technology and items for the home bearing the brunt of spending cutbacks. Food and drink bounced back with 3% growth in April – largely due to Easter falling later this year.
“With interest rates and inflation rising and the Bank of England warning of a possible recession, the squeeze on disposable household income is starting to have an impact on the high street. Against a backdrop of falling consumer confidence, the retail sector has a bumpy time ahead as they face spiraling cost pressures from all directions. Many retailers will have no choice but to raise prices to protect margins, but the longer we see high inflation and real household incomes falling, the more likely it is that consumers will change their spending behaviour, prompting a decline in the health of the retail sector and possibly more casualties on the high street.”
Barclaycard: rate of growth on essential goods slows on three-year comparison
Card spending grew by 18.1% in April on the same time in 2019, while the rate of growth of spending on essential items slowed on goods from petrol (+23% – down from +26.1% in March 2022) and saved money on groceries, says Barclaycard. Supermarket spending was up by 15.9% on three years earlier while spending at specialist food and drink stores was 76% up over the same period – down from +16.9% and +76.9% in March).
Barclaycard monitors spending on credit and debit cards that is processed through its systems. April’s figures are compared with the same time three years ago, in 2019, stripping the effect of Covid-19 lockdowns and trading restrictions from the long-term pattern.
Barclaycard found that spending on utilities grew by 28.8% year-on-year, and in a parallel survey of xx consumers found that one in 10 were concerned about the impact of rising household bills on their finances
José Carvalho, head of consumer products at Barclaycard, says: “The impact of rising living costs on consumer spending is starting to show, with a number of categories – including subscriptions, takeaways, and bars, pubs & clubs – seeing less growth than in March as Brits begin to feel the pinch. However, the improvements seen by airlines and travel agents are particularly positive, and hopefully point to a recovery in spending on international travel later this year.”