A month of two halves as retail sales growth starts to slow in April

April retail sales record fourteenth month of consecutive growth
Total like-for-like sales increased by over 40% compared to April 2021
However, retail sales growth started to slow in second half of month
Online sales also recorded disappointing growth

The retail sector’s strong start to 2022 has started to falter, with like-for-like sales growth significantly slowing in the second half of April, new figures by accountancy and business advisory firm BDO LLP reveal.

According to BDO’s High Street Sales Tracker (HSST), total like-for-like sales, combined in-store and online, increased by +44.9% in April compared to the equivalent month in 2021 when stores began to reopen in the latter part of the month.

Total non-store like-for-like sales rose by +6.4%, the first positive result this year. This is a modest rise from a relatively low base of +28.2% in April 2021.

While fashion and lifestyle categories saw moderate increases in their total like-for-like sales compared to 2021, the homeware sector saw almost no change, growing +1.1%.

The first week of the month saw growth of +81.96% compared to the same week the previous year, followed by an increase of +86.70% in the second week.

However, the final two weeks of the month saw much lower rates of growth. In the third week of April like-for-like sales grew +18.41% compared to the same week in 2021 last year, when non-essential retail re-opened for trading following almost four months of national lockdown. Like-for-like sales then grew by +14.40% in the final week of April 2022 again compared to that same week in 2021.

Sector Results

Fashion saw the biggest growth, with total like-for-like sales increasing by +58.7% for the month, from a base of +84.2% for the same time last year. Fashion was the only category to record positive non-store results in April, which contributed to the fourteenth consecutive month of positive total like-for-like sales for fashion.

Total like-for-like sales in the lifestyle sector increased by +55.7% in April, from a base of +64.3% for the equivalent month last year. However, the sector also recorded a fall in non-store sales for the sixth consecutive month, which contributed to underwhelming growth in total non-store like-for-like sales.

Total like-for-like sales in the homewares category grew by just +1.1% in April. This reflects the re-opening of stores in April 2021 after lockdown, but the sector also suffered poor results in the third and fourth weeks of April 2022, with -8.37% and -11.38% respectively.

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said:

“We continue to see retail like-for-like sales outperform expectations, as April saw yet another month of positive headline numbers. However, a closer look at the data reveals a distinct shift in the middle of the month, with growth across all categories falling substantially in the final two weeks of April. There are a number of factors behind this. Stores reopening in the latter half of April 2021 resulted in a higher base with which to compare this month’s results. We also saw the traditional slowdown in discretionary spending over the Easter bank holiday weekend between the third and fourth weeks of April.

“The cost-of-living crisis has also undoubtedly contributed to the slowing in growth, as consumers reduce their discretionary spending. Consumer confidence is lower than at any point since the financial crash in 2008 so, when combined with high inflation, it’s no surprise to see growth trending downwards. The barely noticeable growth in online sales is another indicator that discretionary spending is slowing down.

“This volatility in consumer demand comes at a time when retailers’ supply chains are more stretched and difficult to manage than ever. They will need to maintain the flexibility and resilience they demonstrated throughout the pandemic if they are to meet customer expectations and maximise their sales.”