Shoppers parked their financial problems in April, says the home delivery expert ParcelHero, to spend money on Easter chocolates, ‘baccy and alcohol. The Office for National Statistics (ONS) retail sales figures for April show sales volumes unexpectedly climbed by 1.4%, against March’s results, led by a 2.8% increase in food store sales. The ONS reports the retail recovery was driven particularly by ‘strong growth in alcohol, confectionery and tobacco sales’.
ParcelHero’s Head of Consumer Research, David Jinks MILT, says: "Shoppers splashed out on a little light relief in April, amid soaring fuel prices, escalating household energy costs and the grim news from Ukraine. It wasn’t only supermarkets reporting a surge in confectionery, cigarettes and booze. The ONS reveals alcohol and tobacco stores reported a huge increase in sales volumes of 8.4%, leading the way in the retail recovery."
Consumers also indulged in a little online retail therapy in the face of soaring costs and the horrors of Ukraine. Online spending values rose 6.2%, taking 27% of all retail sales. In recent months, online sales had been falling, but non-store retailing (largely online sellers without any shops) this month rose by 11.3% and online clothing and footwear also aided the retail recovery by 3.6%, as shoppers treated themselves to new clothes and heels. Easter was also the first chance for many friends and families to reunite without Covid restrictions, and many people will have wanted to dress up for the occasion.
Retail recovery or the final hurrah?
However, retailers shouldn’t fool themselves that these results mean the good times are back. It could be a final hurrah before we all hunker down for the long haul. While overall sales were up over last month, they were actually down -4.9% compared to April 2021. Online sales were down a huge -10.9% compared to last April.
Jinks added: "While this was at least temporary respite from the recent retail gloom, this is still clearly the wrong time for the Chancellor to be considering an online sales tax to finance a rebate on High Street stores’ rates. The last thing consumers and retailers need is a new tax on spending.
"Every successful High Street store also sells online. We entirely agree with the letter Marks & Spencer’s Chief Financial Officer, Eoin Tonge, sent to the government this week, in which he said: “Introducing an additional tax on retail, already overburdened, will simply mean retailers cut their cloth accordingly. This rationalisation will always start with the least profitable parts of a business, which, in the case of multi-channel retailers, will more often than not be high street stores.”
To find out more about why a new online sales tax should not be seen as a way of funding business rates cuts, or of reducing the environmental impact of increased home deliveries, see ParcelHero’s in-depth study.