Retail results: spending caution reflects the challenges facing the wider economy

The Yorkshire Post
By The Yorkshire Post
Published 7th May 2024, 05:00 BST
News today that retail sales dropped four per cent last month versus the previous year ought to reverberate around boardrooms up and down the country, so reflective of the wider economy are they.

Analysts had predicted that consumer confidence was likely to return as Britain headed into Bank Holiday season, but a chillier-than-expected, washed-out April, compounded by an early Easter break meant that green shoots in the economy were as reluctant to emerge as those in garden borders.

Set against the backdrop of last year’s retail growth of more than five per cent, this year’s slump should be taken as a reflection of people’s confidence to spend, as well as their capacity to do so.

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There is little question that stubbornly high food, energy and fuel prices are taking a bigger bite out of disposable income than previously. Anyone getting a new mortgage or having to remortgage is parting with upwards of £200 per month more than they might have been 18 months ago and landlords appear to have carte blanche to charge renters whatever they like.

Retail sales dropped 4% in April versus the previous year, dampened by a spell of wet weather and an early Easter bank holiday. The year-on-year drop is set against a growth of 5.1% in April 2023, but was artificially worsened by the earlier timing of Easter, which previously pushed March sales unusually high, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor. Photo, Jonathan Brady/PA WireRetail sales dropped 4% in April versus the previous year, dampened by a spell of wet weather and an early Easter bank holiday. The year-on-year drop is set against a growth of 5.1% in April 2023, but was artificially worsened by the earlier timing of Easter, which previously pushed March sales unusually high, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor. Photo, Jonathan Brady/PA Wire
Retail sales dropped 4% in April versus the previous year, dampened by a spell of wet weather and an early Easter bank holiday. The year-on-year drop is set against a growth of 5.1% in April 2023, but was artificially worsened by the earlier timing of Easter, which previously pushed March sales unusually high, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor. Photo, Jonathan Brady/PA Wire

It is therefore not surprising that retailers at the end of the spending line will be feeling the impact - people simply don’t have the same spare income at the end of the month to spend.

Take the case of Nick Joannou, who runs The Wine Glass in Halifax’s Borough Market, a highly-valued independent store in a location you would expect to enjoy high footfall. He simply cannot make it work anymore, the business isn’t viable, and so this weekend just gone was his last trading weekend.

He leaves with a plea to shoppers who may be encouraged by the warmer weather to seek out independent businesses to spend with them, because whilst the larger retailers, as we have seen of late, are not immune to spending downturns, it is those smaller ones we love that are most vulnerable.

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