Press release

21 May 2021 London, GB

Strong UK retail sales in April as eased restrictions help increasingly confident consumers lift spending – EY ITEM Club comments

Strong UK retail sales in April as eased restrictions help increasingly confident consumers lift spending – EY ITEM Club comments

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Related topics Growth COVID-19
  • Retail sales were very strong in April as they benefitted from non-essential retailers being allowed to re-open on 12 April. There were signs that increasingly confident consumers were looking to release pent-up demand even before this
  • Retail sales volumes rose 9.2% month-on-month (m/m) in April after an increase of 5.1% in March. The year-on-year increase of 42.4% was inflated by non-essential retailers being shut throughout April 2020
  • Online sales fell 5.6% m/m in April but were up 31.9% year-on-year in value terms. This caused the share of online sales to fall back to 30.0% of total sales – down from 34.7% in March and a record 36.2% in February – although this was still substantially up on the 23.2% share in March 2020
  • A pick-up in the retail sales deflator in April adds to evidence of mounting inflationary pressures
  • April's increase in retail sales adds to evidence that the economy started the second quarter strongly, and supports belief that consumers will play a leading role in the economic recovery
  • Retail sales should continue to benefit from non-essential retailers now being open. However, some spending from the retail sector may be diverted away by the hospitality sector fully re-opening on 17 May
  • Consumer activity should benefit from recent very high savings ratios, while the labour market has been resilient and has even shown improvement recently. Consumer confidence has strengthened markedly too

Howard Archer, chief economic advisor to the EY ITEM Club, says: 

“Retail sales volumes rose 9.2% month-on-month in April, as they were helped by non-essential retailers bring allowed to re-open from 12 April. Retail sales had previously risen 5.1% month-on-month in March, which had suggested that increasingly confident consumers were looking to release pent-up demand despite non-essential retailers being closed through the month.

“Retail sales volumes were up 42.4% year-on-year in April, lifted by the fact that non-essential retailers had been closed through April 2020 during the first lockdown. April’s retail sales volumes were 10.6% higher than they had been in February 2020 when the pandemic’s economic impact was yet to be felt.

“The ONS reported that ‘Non-food stores provided the largest contribution to the monthly growth in April 2021 sales volumes, aided by strong increases of 69.4% and 25.3% in clothing stores and other non-food stores respectively.’

“Meanwhile, food stores saw a decline of 0.9% month-on-month, having grown over the previous three months.

“Online sales fell 5.6% month-on-month in April but were up 31.9% year-on-year in value terms. Online sales’ share of total retail sales fell back to 30.0% in April, down from 34.7% in March and a record 36.2% in February. Even so, this was up markedly from 23.1% in March 2020 and 20.0% in February 2020.

“It is evident that the various restrictions on non-essential retailers throughout the pandemic have given extra impetus to an already-rising underlying trend for online sales.

“The annual retail sales deflator rose 1.0% year-on-year in April – having been flat year-on-year in March – with fuel prices up 12.9% year-on-year. Excluding fuel prices, the annual retail sales deflator was up 0.4% year-on-year in April after a decline of 0.3% in March.”