UK retail sales see record jump in April 2021 as consumers flock for shopping

Summary

• UK retail sales recorded sharpest growth on record in April 2021
• Easements have cumulatively assisted in driving the retail sales
• Clothing and footwear provided the biggest upward contribution to the net sales
• a drop was seen in online sales as physical stores resumed their operations
• GfK consumer confidence improved in May with reading hitting a 14-month high

Keeping up the pace of economic recovery, the retail sales in the United Kingdom registered the sharpest annual jump of all time due to the lower denominator as compared to reading recorded for the same period in the last year.

Record high annual jump

According to the data revealed by the Office for National Statistics (ONS), the retail sales in the UK grew by a record 42.4 per cent as the individuals got relieved from the national lockdown and other pandemic-induced restrictions. Of late, the macroeconomic data have adequately indicated the so-called path to recovery with almost all the indicators sketching an eventful bounce back from the pandemic-laden slowdown in the commercial activities.

On a sequential basis, the retail sales in the corresponding month jumped 9.2 per cent, recording the third-highest at least in the pandemic era. The planned easements in April and the resumption of various sectors at a much larger scale have cumulatively assisted in driving the retail sales in the upwards direction as a considerable section of non-essential retail settings were allowed to restart from April 2021.

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Clothing steers major uptick

Clothing and footwear emerged as the major section that provided the biggest upward contribution in the overall retail sales as the component recognised an uptick of 69.4 per cent. Interestingly, the total sales in Britain in April 2021 are now 10.6 per cent higher as compared to the sales volume seen in February 2020, the last month that can be included in the pre-pandemic era.

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Notably, there was a substantial drop in the online sales with all the sectors realising a drop in their respective online proportions on a month-on-month (MoM) basis as most of the physical stores resumed their operations in April 2021, effectively dividing the footfalls that prefer to purchase the items from the brick-and-mortar stores as against the new-age tradition of e-commerce portals.

Proportionately, the chunk of the online sales out of the total sales volume slipped to 30 per cent in April as compared to 34.7 per cent in March 2021.

Consumer confidence gets a boost

Meanwhile, the consumer confidence improved in May 2021 with the reading hitting a 14-month high. As per the data released by GfK Group, the consumer confidence index grew to -9 in May from -15 in April.

This has been the highest reading in the last 14 months. Earlier in March 2020, the GfK consumer confidence index hit -9, while a reading of -7 was recorded in February 2020. The removal of lockdown restrictions have collectively benefited in driving up the retail sales in the preceding month and bolstering consumer confidence in the present month.

Most of the consumer and retail stocks traded in the negative region tracking the benchmark stock indices of London Stock Exchange. The benchmark FTSE 100 struggled to surpass the previous close even with Wall Street starting on a positive footing.

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Stocks remain in red

Shares of Compass Group Plc (LON: CPG), the Chertsey-headquartered contract foodservice firm, and the London-based supermarkets operator J Sainsbury (LON: SBRY) were the only notable gainers among the 101-constituent pack of FTSE 100. Most of the retail stocks failed to catch buying momentum on Friday, irrespective of a worthwhile jump in the retail sales in April and buoyed consumer confidence in May.

The stock of J Sainsbury rose 0.34 per cent to GBX 263.70 from the previous closing of GBX 262.80, whereas the shares of Compass Group added 0.45 per cent to GBX 1,549.50 from the last close of GBX 1,542.50 apiece.

On the other hand, the shares of Next Plc (LON: NXT), Ocado Group Plc (LON: OCDO), and B&M European Value Retail SA (LON: BME) dropped 1-2 per cent, while the stock of Kingfisher Plc (LON: KGF), the London-headquartered retailing major, crashed a little more than 5 per cent.

Kingfisher Plc (21 May)

(Source: Refintiv, Thomson Reuters)

Kingfisher shares were the biggest loser among the FTSE 100 deck today.

Other retail and consumer stocks that traded in the negative region include Burberry Group Plc (LON: BRBY), Tesco Plc (LON: TSCO), JD Sports Fashion Plc (LON: JD), Unilever Plc (LON: ULVR), Diageo Plc (LON: DGE), Associated British Foods Plc (LON: ABF) and Reckitt Benckiser Plc (LON: RKT).