By David Milliken and Andy Bruce
LONDON (Reuters) -British shoppers splashed out on new clothes in April after shops reopened following months of lockdown closures, adding to signs of a robust economic recovery, official data showed on Friday.
Sales volumes in April jumped 9.2% month on month – twice the average forecast in a Reuters poll of economists and the biggest rise since June – after rising 5.1% in March. Clothing sales soared by almost 70%.
“Fashion retailers (were) the ultimate beneficiaries of beer gardens reopening and the ‘rule of six’ night out returning,” said Aled Jones, head of retail at Lloyds Bank.
Bank of England policymakers are keeping a close watch on retail sales, expecting a surge in spending as wealthier households spend savings built up during lockdowns.
The central bank forecast this month that the economy would grow by 7.25% this year after slumping by nearly 10% in 2020, its biggest decline in more than 300 years.
But unlike after previous recessions, unemployment has stayed low so far, thanks to a costly government furlough programme that has benefited millions of employees.
Separate data on Friday, from Britain’s longest-running survey of consumer sentiment, showed that morale in May was back at where it was just before the country first went into lockdown in March 2020.
The Office for National Statistics said retail sales in April were 10.6% above their pre-pandemic level. However, many high-street shops have suffered badly from repeated lockdowns that accelerated the shift to online commerce.
Department store Debenhams closed its last store this month after more than 240 years of trading and its brand name was bought by online retailer Boohoo.
Retailers such as clothing and furniture stores that the government classed as non-essential were unable to reopen to shoppers in England until April 12, after being forced to close in early January.
Online retail’s share of spending dropped to 30.0% in April from 34.7% in March, its lowest since December. Spending at supermarkets also fell slightly on the month as restaurants reopened for outside dining.
Sales volumes last month were 42.4% higher than in April 2020, when they collapsed during Britain’s first coronavirus lockdown, the ONS said.
Consultants Capital Economics said sales growth was likely to level off now that spending was above pre-crisis levels.
“Economic recovery will continue. It’s just it will be driven by a surge in spending in the pubs, restaurants and cinemas rather than the shops,” Capital Economics’ chief UK economist Paul Dales said.
(Reporting by David Milliken and Andy BruceEditing by David Goodman and Raissa Kasolowsky)