We examine the data on retail sales, and the implications for the sector.
Retail sales regained some positive momentum in April, rising by 0.5% after having fallen in March. The latest figures should be interpreted with caution, as March’s sales were negatively impacted by poor weather conditions; however, the recent resilience of the retail sector shows no sign of running out of steam just yet. Indeed, underlying momentum remains firm, with sales growing by 0.8% on a three-month-on-three-month basis (the quickest rate since August 2021).
Indicators of consumer spending have proved surprisingly resilient this year, reflecting, at least in part, the income security provided by the tight labour market. The UK has around one vacancy for every unemployed person – remaining close to the record low seen in mid-2022 – and the unemployment rate remains very low by historical standards. The tight jobs market has pushed up wage growth, which has in turn supported spending (even as inflation remains high).
Retail sales will likely be supported by an improving con
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