Easter just brief ‘period of respite’ for UK retailers ahead of more sustained downturn, experts warn

Feelgood may be short-lived warn experts as retail posts strong figures for April

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The Independent Online

The late timing of Easter boosted UK retail sales in April but experts have warned the rise is likely to be a brief “period of respite” ahead of a more sustained downturn.

According to a sales monitor compiled by the British Retail Consortium (BRC) and accountancy firm KPMG, UK retail sales increased by 5.6 per cent in April like-for-like compared to period last year, when they decreased by nearly 1 per cent.

The data echoes a similar survey from Barclays which found that consumer spending rose 5.5 per cent in April driven by a later Easter and rising inflation.

But Paul Martin, UK head of retail at KPMG said the increase in sales in April only “provided a brief period of respite for retailers” and warned that the figures should be taken with “pinch of salt”.

“Much of the rise was driven by the timing of Easter and the growing inflationary pressures the sector is facing, rather than a sudden upswing in consumer confidence,” said Mr Martin.

“Food and drink sales soared significantly in April, suggesting that feasts remain at the heart of festive holidays,” he added. “That said, in the ultra-competitive grocery sector, these growth figures should be taken with a hefty pinch of salt, with margins under significant pressure and profitability remaining a concern.”

Helen Dickinson, chief executive of the BRC, also said “the positive distortion from the timing of Easter was largely responsible for the month’s growth and looking to the longer-term signs of a slowdown, the outlook isn’t as rosy.”

Inflation remained at a three-year high in March, according to the Office for National Statistics’ most recent data. Prices, as measured by the consumer prices index (CPI), rose by 2.3 per cent during the period.

Paul Lockstone, managing director at Barclaycard, said: “A late Easter and rising prices provided a superficial boost to spending in April, but behind the headline figure it’s clear consumers are recognising and responding to the inflationary pressures being placed on household budgets.

“Despite growth across a number of categories, the spending picture in real terms is one of growing caution, as seen by declining confidence levels amongst the UK’s consumers.”