Warm weather outshines tariff uncertainty as retail sales up

The latest ONS retail sales figures show volumes increased by 1.3%, driven by food sales (3.9%), department stores (2.8%) and household goods (2.1%).

Jacqui Baker, Head of Retail at RSM UK and Chair of ICAEW’s Retail Group, comments: “Retail sales continued its positive streak in April, as the sunny weather provided a jump in consumer spending with food having a bumper month as everyone dusted off their BBQs. The high street also saw a boost in April as consumers splashed out on household goods and tech. It’s particularly encouraging to see retailers maintain momentum despite the various headwinds that hit the sector last month. The key is now ensuring that growth continues as we enter the summer months. 

“Despite the uptick in sales, retailers continued to offer discounts as a tactic to shift stock, with clothing and footwear inflation down 1.1% month-on-month in April. However, that followed a big price hike in March, as retailers tried to offset the impact of increasing employment costs. But there’s only so much retailers can pass on before spooking consumer confidence which is already shaky, although we did see an uptick in April. 

“On top of tariff uncertainty and the jump in staff costs, recent headlines have been dominated by cyber attacks in the retail industry, highlighting yet another risk and cost for retailers to navigate. These incidents demonstrate just how crucial it is for retailers to remain agile and invest in cyber resilience, as the financial and reputational consequences can be devastating.” 

Thomas Pugh, economist at RSM UK, added: “UK consumers appear to have shrugged off the start of the tariff war in April with retail sales volumes excluding fuel rising by a strong 1.3% m/m. Indeed, a sunny and warm April sent food sales up by 3.9%. This suggests that forecasts of growth slipping into negative territory in April may be overdone.

“What’s more, consumer confidence rebounded in May to -20, although this is still well below the recent peak of -13 in August last year, as Donald Trump rolled back the worst of the tariffs. This reflects similar moves in business sentiment as the PMIs also recovered a little in May. 

“The upshot is that April was almost certainly the nadir and even last month may not be quite as bad as it felt at the time. Indeed, the risks to April are now weighted to the upside. Looking ahead, consumer spending growth will face the headwinds of rising inflation, slowing wage growth and unemployment creeping up. However, we still expect real incomes to rise and with the savings rate extremely high and interest rates falling, there is plenty of room for consumers to save a little less, as long as confidence continues to improve.”