Retailers suffer biggest drop in consumer spend on record: BRC

Retail spending suffered the sharpest decline since records began last month, according to the British Retail Consortium.

Year-on-year consumer spend dropped by 3.1 per cent in April, following a 2.3 per cent rise in March, adding to downbeat data that makes a Bank of England interest rate hike this week even less likely.

The drop – the worst since the mid-1990s – was partly down to the timing of the Easter holidays, which started in March this year rather unlike last year when they were in April.

But the BRC also warned of a weakening underlying trend in consumer spending.

“Even once we take account of these seasonal distortions, the underlying trend in sales growth is heading downwards,” BRC chief executive Helen Dickinson said.

The drop came despite ongoing deflation, particularly in non-food items, because of the “squeeze on households’ discretionary spending”.

Dickinson added: “As negotiations on Brexit continue to play out against this backdrop the importance of addressing the issue of frictionless movement of goods across borders is increasing. Retailers must have clarity on this position if they are to continue to provide a wide range of goods for consumers at affordable prices.”

Mike Watkins, head of retailer and business insight at Nielsen, said: “Recent industry data suggests poor footfall and with unseasonably cool weather punctuated by a brief hot spell, sales momentum has been hard to sustain.

“So whilst promotional activity continued after Easter, retailers are still keeping prices competitive to tempt shoppers back into store as consumers not yet feeling better off.”