Retailers told to prepare for tightening of purse trends

Shoppers walk along Oxford Street in central London on January 20, 2013.   Four big British high-street retailers had to call in administrators this winter as cash-strapped, web-literate consumers proved unforgiving of stores failing to adapt to fast-evolving markets.  AFP PHOTO/ANDREW COWIE        (Photo credit should read ANDREW COWIE/AFP/Getty Images)

UK retailers enjoyed a surge in sales in April thanks to a late Easter, but there could be tougher times ahead, a new survey has found.

The British Retail Consortium and KPMG said sales rose 5.6% on a like-for-like basis from April 2016, when they had decreased 0.9% from the preceding year.

On a total basis, sales rose 6.3% in April, against flat growth the year before.

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The BRC noted that the performance was positively distorted by the timing of Easter this year.

Over the three months to April, non-food retail sales in the UK increased 0.3% on a like-for-like basis and 0.7% on a total basis.

Online sales of non-food products grew 8.2% during the same period, while in-store sales declined 1.3% on a total basis.

BRC chief executive said Helen Dickinson said the Easter holidays provided a welcome boost in retail sales, but warned that the future outlook isn’t as rosy.

“Taking a closer look at the sales figures, consumer spend on food and non-food items is diverging. Food categories continue to contribute the most weight to overall growth, although food inflation has a part to play in this. Meanwhile, consumers are being more cautious in their spending towards non-food products and focussing more on value priced lines.

“Shop prices are still down overall although other items of consumer spending are increasing headline inflation and hence driving a tightening of purse strings,” she added.

“Although today’s figures do indicate that consumers are still willing to spend, with a cocktail of rising costs and slowing wage growth as the backdrop, conditions for consumers will get tougher. The next Government needs to deliver a plan that puts consumers first in its economic policies and the forthcoming Brexit negotiations.”

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