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Key Messages

• Good weather and timing of Easter huge boost to retail sales
• YoY retail sales values +6.2%, volumes +5.3%
• MoM volume growth +1.2% vs economist consensus +0.3%
• Implied inflation of 0.9% lower than headline CPI (3.5%)
• Strong rebound in grocery sales (vals +5.5%, vols +2.7%)
• Non-food sales on the surface stronger (vals +7.5%, vols +7.6%)
• Non-food remains marginally deflationary (-0.1%)
• Off-licences, carpets, DIY & garden centres standout categories
• Strong performance from clothing (vals +8.6%, vols +6.3%)
• Online sales decline -0.3% MoM
• Online penetration decreases by -30bps to 26.8%
• Inevitable deceleration of retail sales growth in May
• But underlying consumer demand remains robust.

鈥淚t won鈥檛 last鈥�. The refrain across the economist community. For that, read: 鈥渨e got it spectacularly wrong 鈥� again鈥�. Today鈥檚 retail sales figures topped even the most bullish of forecasts. Not perfect in every way, but a fourth consecutive month of significant outperformance.

Easter + good weather

Retail sales values (exc fuel) grew year-on-year by +6.2%, the highest rate of monthly growth since August 2023, when spend was artificially boosted by inflation. Not so this time. Retail sales volumes (exc fuel) also grew year-on-year by +5.3%, the highest rate of monthly growth since January 2022. No hyper-inflation nor COVID distortion in these latest figures at all.

Of course, the April figures were boosted by a couple of other factors, not least the timing of Easter and prolonged good weather for most of the month. The influence of the weather a reality for the retail market that the economist community are loath to acknowledge.

Easter falling in April rather than at the end of March in 2024 was always going to inflate these figures, so in many respects, the headline figures should come as little surprise. But ordinarily, this would have been preempted by a significant trough the previous month, which simply did not materialise this year (March YoY sales values +3.1%, volumes +2.6%). So, it would be wrong to suggest that April鈥檚 figures were only strong because of the timing of Easter. Smoothing out Easter over a two-month period, values were up by ca.+5% and volumes by ca. +4% across March and April.

Of course, the ONS majored on the largely meaningless month-on-month figures, which showed a +1.2% increase in volumes (on top of a +0.1% volume increase in March). Meaningless as this figure may be, it was still four times higher than the economist consensus forecast of +0.3%. Big mistake. Big. Huge.

Performance by sector

April鈥檚 strong figures were underpinned by a welcome return to form for the grocery market. Foodstore sales values grew by +5.5% YoY and, more encouragingly still, volumes grew by +2.7%. This marked only the third month of positive volume growth in the last three years and the strongest monthly performance since the early days of COVID-stockpiling.

On the surface at least, non-food sales were stronger still. Non-food sales values grew +7.5%, while volumes were ahead +7.6%. The blot on the copybook here was implied deflation of -0.1% (vs implied inflation of +2.8% in food). With all the talk of rising prices generally (headline CPI rising to +3.5% in April) and further tariff-induced hikes in the pipeline, non-food retail remains stubbornly (and slightly worryingly) deflationary.

The usual variances of performance between non-food sub-sector. Surprisingly, Carpets were the best performing sub-sector (values +23.2%, volumes +23.9%), followed more predictably by Garden Centres (+15.1%, +15.1%), DIY (+13.7%, +14.9%) and Sports (+11.2%, +12.2%).

No doubt boosted by the weather, Clothing had its best month for some time (values +8.6%, volumes +6.3%). The ONS鈥� implied level of inflation in clothing of +2.3% infinitely more credible than the deflation of -10.1% suggested in earlier figures released by the British Retail Consortium (BRC). In contrast to Clothing, Footwear had another slow month (-5.3%, -3.1%), as did Textiles (-33.6%, -34.4%), Chemists (-13.7%, -15.7%) and Cosmetics (-4.3%, -5.1%).

Good weather played less into the hands of online. Online sales values fell by -0.3% MoM, compared to overall retail sales MoM growth of +0.7%. As a result, online penetration declined by -30bps from 27.1% to 26.8%, well within the 鈥榥ew norm鈥� monthly fluctuation bands of 25% - 28%. But notably, for the fourth month in row, online penetration remained lower than the figure registered for 2024 as a whole (27.2%).

Wider context

January and February were strong, March stronger still. And April even stronger than that. A healthy pattern of strong (and accelerating) value and volume growth and manageable levels of inflation.

But can it last? In one sense, no. It would be wholly unreasonable to expect a pattern of accelerating monthly growth indefinitely. Indeed, May鈥檚 figures are highly unlikely to hit the highs of this month, so when they are released, they will almost inevitably show a month-on-month decline. Expect a predictable chorus of 鈥渟ee 鈥� we told you it wouldn鈥檛 last鈥� from the economist community. And the media no doubt blaming the supposed downturn on the cyber attacks at M&S鈥�

But in another sense, yes, it can last. A lower rate of growth likely in May than April, but a decent rate of YoY growth nonetheless. What more can we hope for 鈥� aside from the spell of good weather to continue indefinitely?