Alcohol and tobacco sales boosted retailers in April despite higher prices

Sales of alcohol, tobacco and summer clothing drove up retailers last month, although many were forced to raise their prices.

Customers flock to supermarkets to buy more cigarettes and alcohol, but spend less at non-food stores.

The UK retail sector saw a 1.4% rise in sales during the month, after contracting in March, data from the Office for National Statistics (ONS) showed.

(PA graphics)

“Retail sales rose in April after falling last month.

“However, these numbers still show a continuing downward trend over the long term,” said Heather Bovell, deputy director of Surveys and Economic Indicators.

“The rise in April was driven by an increase in supermarket sales, led by alcohol, tobacco and sweets, and informal licenses also reported an increase, possibly due to more people staying in stores to save money.

“Apparel sales had a strong month, particularly online, with some retailers indicating consumers were buying clothes for summer holidays and weddings.

“Online sales are up a bit this month, but despite this increase, they have mostly declined since their peak in early 2021, although they are still well above pre-pandemic levels.”

The rally did not halt its 0.3% decline in the three months to April, but it comes in the face of higher prices.

The latest inflation figures showed a massive rise in the cost of living, especially in April with soaring energy bills.

UK Inflation Rate for Selected Goods &  Services

(PA graphics)

According to the Consumer Price Index, inflation was 9% in the year to April.

Retailers having to pass on their increased costs to customers will be somewhat reassured by the April numbers, said David Baker, chief investment officer at consultancy Mazars.

“The reading contrasts with recent consumer confidence data and suggests that near-full employment and consumers’ ability to tap into savings accumulated during the pandemic may prevent shoppers from being overly cautious despite cost-of-living challenges associated with high inflation levels,” he said.

But Ralph Robinson, head of retail at technology consultancy BJSS, said the April numbers should not give false hope after the downturn for the past three months for which data is available.

“Retailers looking for some form of relief from today’s ONS numbers will be disappointed; after years of turmoil from Brexit to Covid and now the conflict in Ukraine, consumer confidence remains low and macroeconomic shocks such as high inflation will continue to add to the pressure. on retail sales and profit margins.

Initial estimates that retail sales fell 1.4% in March were revised to 1.2% on Friday.

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