UK retail sales have fallen a record 18.1% month-on-month in April according to the latest statistics.
Howard Archer, chief economic advisor to the EY ITEM Club, comments: “Retail sales volumes fell a record 18.1% month-on-month and 22.6% year-on-year in April as they were hit by the full impact of the lockdown restrictions that were imposed on 23 March. This notably included the closure of non-essential retailers. Unsurprisingly, a BRC/ShopperTrak survey showed shopper footfall down 84.7% year-on-year in April.
“This followed a drop of 5.2% month-on-month in March when sales had only been affected by just over a week from the lockdown. This meant that retail sales volumes had contracted 1.6% quarter-on-quarter over the first quarter.
“Retail sales volumes were down 8.6% in the three months to April compared to the three months to January.
“Online sales as a share of total retail sales jumped to a record 30.7% in March as consumer switched to online purchases as coronavirus increasingly impacted. This was up from 19.1% in April 2019.
On what the outlook looks like for the sector, Howard comments: “The retail picture will remain particularly difficult until the Government starts allowing non-essential retailers to open as part of the easing of the lockdown. Meanwhile, the near-term fundamentals for consumer spending have clearly taken a very substantial downturn as a result of coronavirus.
“Many people have already lost their jobs despite the supportive government measures – as was highlighted by a 856,500 rise in claimant count unemployment in April – while others will be worried that they may still end up losing their job once the furlough scheme ends.
“Furthermore, consumers are highly likely to adopt a very cautious approach to discretionary purchases given the current highly fraught and uncertain economic environment. Consumer confidence currently remains at record low or near record low levels, with most measures reporting most consumers seeing it as a very bad time to make major purchases.”