Extract from Redwood Financial’s Economic Review April 2021
Official statistics show that retail sales volumes rose significantly in March, while survey evidence points to a further uplift in sales during April and May.
According to the latest ONS data, retail sales volumes jumped by 5.4% in March, following the partial recovery that began in February. The increase was largely driven by a strong performance from the clothing sector, as shoppers bought new outfits prior to the easing of lockdown restrictions. Retailers also reported a growth in sales of mobility equipment, as older people went out more following their vaccinations, and an increase in sales at garden centres.
Survey evidence also suggests the growth in sales is likely to gather momentum as restrictions continue to ease. Research by Deloitte, for instance, found that ‘going to a shop’ was top of the list of leisure activities people were most likely to do after lockdown.
Data from the Confederation of British Industry’s latest Distributive Trades Survey has also reported a sharp upturn in sales. In total, the survey’s retail sales balance jumped to +20 in April from -45 in March, its highest level since September 2018. In addition, the survey found that retailers expect sales to remain above seasonal norms during May.