Belfast Telegraph

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Shoppers shrug off EU uncertainty to boost retail sales

Published 19/05/2016

The Office for National Statistics said retail sales increased by 1.3%
The Office for National Statistics said retail sales increased by 1.3%

UK retail sales rebounded strongly in April as shoppers put uncertainty about the EU referendum aside to go on a spending spree.

The Office for National Statistics (ONS) said retail sales increased by 1.3% compared with March, and sales were 4.3% higher than a year earlier.

Disappointing figures for March were revised and were not as bad as previously feared.

The positive figures are partly down to an effort by clothing retailers to mitigate unseasonably warm weather with discounts, and department stores also saw a 1.9% increase in sales.

The upturn is at odds with the latest GfK consumer confidence survey, which suggested that consumers are becoming less optimistic about spending over the next year, perhaps in response to the referendum.

Ian Geddes, head of retail at Deloitte, said: "The retail and leisure industry will be looking forward to the feelgood factor that summer may bring, with the Queen's 90th birthday celebrations, Wimbledon and the Rio Olympics likely to boost confidence and, importantly, spending in the short term.

"England's progress in the Euro 2016 championships may well determine whether UK retailers win or lose this quarter."

The ONS said average store prices, including petrol stations, fell by 2.8% in April.

The amount spent in the retail industry increased by 1.2% compared with April last year and 1% compared with March this year.

The value of online sales increased by 9.3% on a year ago and 1.7% compared with March.

Ben Brettell, senior economist at Hargreaves Lansdown, said: "The UK economy's glass was beginning to look decidedly half-empty, so today's retail sales figures are a welcome tonic to the gloomy economic mood.

"Diminishing confidence ahead of the EU referendum and weak pay growth were expected to take a toll on retail sales. Indeed market researcher GfK's consumer sentiment indicator hit a 15-month low in April, which looked ominous for today's figures, but in the event fears that the referendum would have a negative impact on consumer spending proved unfounded."

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