April retail sales rise slightly more than expected

Retail sales volumes rose an estimated 0.5% in April, following a 1.2% decline in March. Sales volumes rose  by 0.8% in the three months to April 2023 when compared with the previous three months, the highest rate since August 2021. The month saw increases in both Food (up 0.7%) and non-food (up 1.0%) store sales. Retail sales had been expected to rise by 0.3% (Trading Economics).

Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club, commented: “Retail sales volumes in April came in slightly better than expected, with slightly better weather helping.

“No one is going to look at these figures and claim consumers are feeling flush. But at the same time the cataclysmic predictions for the UK economy in 2023 are proving very wide of the mark.

“Results from retailers themselves back this up. Earlier this week M&S reported a relatively upbeat trading update, while results from the likes of Next and Primark also show little evidence of a significant slowdown in consumer spending.

“The worry is that higher interest rates have yet to really bite. Many people are still sitting pretty on fixed rate mortgages. When they refinance they are going to find their disposable incomes drop significantly. At that point retailers may really start to feel the pinch, especially if inflationary pressures remain elevated.”