Inflation drives retail sales growth but shopper budgets remain under pressure

Henry Saker-Clark, PA Deputy Business Editor

Tue, 9 May 2023 at 12:01 am BST

High inflation continued to support retailers in April but soaring prices meant shoppers bought fewer products during the month.

The latest BRC-KPMG monthly retail sales monitor reported that retail sales grew 5.1% in April, compared with a 0.3% decline in the same month last year.

However, the industry experts highlighted that although customers spent more, the volume of items bought by shoppers was lower as inflation continues to weigh on budgets.

The Office for National Statistics (ONS) said UK inflation hit 10.1% in March, amid record food and drink inflation at 19.1%.

The new data showed that retailers said food sales increased by 9.8% over the three months to April, driven by jumps in price, with sales volumes actually lower for the period.

Meanwhile, non-food stores saw a 1.2% sales increase over the three-month period to April, amid pressure on fashion retailers.

Helen Dickinson, chief executive of the British Retail Consortium, said: “While retail sales grew in April, overall inflation meant volumes were down for both food and non-food as customers continued to adjust spending habits.

“Clothing sales underperformed as the poor weather left customers thinking twice before decking out their summer wardrobe.

“Meanwhile, a boost to overseas tourism over Easter helped jewellery, watches and cosmetics.”

Paul Martin, UK head of retail at KPMG, said: “Consumer demand has so far been fairly resilient to the twin drags of high inflation and high interest rates, but as government energy support comes to an end for many, savings start to dwindle and other household bills rise, it is likely that the next few months will continue to be challenging as the consumer tank empties.

“Much hinges on whether soaring food inflation can be brought under control enough to allow consumers to comfortably start spending again on non-essential items.”