Retail sales, Great Britain: April 2016

The volume of retail sales in April 2016 is estimated to have increased by 4.3% compared with April 2015.

The underlying pattern in the data, as suggested by the 3 month on 3 month movement in the quantity bought, increased by 0.3%.

Compared with March 2016, the quantity bought in the retail industry is estimated to have increased by 1.3%.

Average store prices (including petrol stations) fell by 2.8% in April 2016 compared with April 2015.

The amount spent in the retail industry increased by 1.2% compared with April 2015 and increased by 1.0% compared with March 2016.

The value of online sales increased by 9.3% in April 2016 compared with April 2015 and increased by 1.7% compared with March 2016.

Revisions to this release were caused by the incorporation of late data. The earliest revisions point for current price, non-seasonally adjusted data was March 2014. More information on revisions can be found in the background notes.

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 3 April 2016 to 30 April 2016. Unless otherwise stated, the estimates in this release are seasonally adjusted. Estimates for April 2016 do not include Easter, whereas Easter 2015 fell in the April 2015 reporting period.

The estimates in this release are based on a monthly survey of 5,000 retailers, including all large retailers employing 100 people or more and those with annual turnover of greater than £60 million who employ 10 to 99 people. It is estimated that this survey covers approximately 95% of all known retail turnover in Great Britain.

The quality of the estimate of retail sales

Retail sales estimates are produced from the Monthly Business Survey – Retail Sales Inquiry (RSI). The timeliness of these retail sales estimates, which are published just 3 weeks after the end of each month, makes them an important early economic indicator. The industry as a whole is used as an indicator of how the wider economy is performing and the strength of consumer spending. Results are revised for the previous 13 published periods. More information about the data content for this release can be found in the background notes.

Revisions are an inevitable consequence of the trade-off between timeliness and accuracy. The response rate in April 2016 was 61.6% of questionnaires, accounting for 93.7% of registered turnover in the retail industry. Therefore, the estimate is subject to revisions as more data become available.

All estimates, by definition, are subject to statistical uncertainty and for the retail sales index we publish the standard error associated with the non-seasonally adjusted estimates of year-on-year and month-on-month growth in the quantity bought as a measure of accuracy. More information on these standard errors can be found in the background notes and in the quality tables of this release.

We are continually working on methodological changes to improve the accuracy of the retail sales estimates; progress on these can be found on the continuous improvement page.

The datasets offer different ways to access the data, they include:

• non-seasonally adjusted and seasonally adjusted volume and value indexes by industry
• year-on-year and month-on-month growth rates by industry

At a glance

In April 2016:

the quantity bought in the retail industry (volume):

• increased by 4.3% compared with April 2015; this was the 36th consecutive period of year-on-year growth
• increased by 1.3% compared with March 2016

the amount spent (value):

• increased by 1.2% compared with April 2015
• increased by 1.0% compared with March 2016

Amount spent in the retail industry

In the 4 week reporting period during April 2016, the amount spent in the retail industry was £28.1 billion (non-seasonally adjusted).

This compares with:

• £34.4 billion in the 5 week reporting period for March 2016
• £27.6 billion in the 4 week reporting period for April 2015

This equates to an average weekly spend of:

• £7.0 billion in April 2016
• £6.8 billion in March 2016 and
• £6.9 billion in April 2015

Main points

In April 2016:

• all store types, except textile, clothing and footwear stores showed increases in the quantity bought compared with April 2015
• there were decreases in textile, clothing and footwear stores, household goods stores and fuel stores in the amount spent compared with April 2015
• all store types saw falls in average store price compared with April 2015
• non-seasonally adjusted data show that the prices of goods sold in the retail industry (as measured by the implied price deflator) decreased by 2.8%; this was the 22nd consecutive month of year-on-year price falls

More information on how the implied price deflator and other estimates in this release are calculated, can be found in section 3 of the background notes.

Textile, clothing and footwear stores consist of 3 different store types. Table 3 shows the store types, respective weights in retail sales, year-on-year seasonally adjusted growth rates and average store price.

We can see that clothing stores contribute the most to this sector while textiles and footwear are much smaller.

In April 2016, there were falls of 6.3% in the quantity bought and 6.0% in the amount spent in textile, clothing and footwear stores compared with April 2015. There were falls in the quantity bought and amount spent in textile and clothing stores while footwear was the only store type to show an increase in both measures year-on-year. Feedback from retailers suggests that the poor performance year-on-year could be due to the early Easter and unseasonal weather affecting summer clothing ranges.

Figure 1 shows the quantity bought, amount spent and average store price in clothing stores over a longer time period.

Looking at the short-term picture, April 2016 compared with March 2016:

• quantity bought increased by 1.7%
• amount spent increased by 2.1%
• average store price fell by 0.4%

After the weakness in the year-on-year picture in clothing stores, the increases month-on-month in the quantity bought and amount spent could be seen as unusual, however, the chart shows that the monthly series is volatile and seems to be affected by changes in price. In the latest period average price in store fell and both the quantity bought and amount spent increased, whereas, we saw the opposite effect in March 2016, where prices increased and the quantity bought and amount spent fell.

Seasonally adjusted internet sales data are published in the RSI Internet tables and include:

• a seasonally adjusted value index
• year-on-year and month-on-month growth rates

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain. The reference year is 2012=100.

Main points:

• average weekly spending online in April 2016 was £886.6 million; this was an increase of 9.3% compared with April 2015
• the amount spent online accounted for 13.4% of all retail spending, excluding automotive fuel, compared with 12.4% in April 2015

Table 4 shows the year-on-year growth rates for total internet sales by sector and the proportion of sales made online in each retail sector.

The retail industry is divided into 4 retail sectors:

• predominantly food stores (for example, supermarkets, specialist food stores and sales of alcoholic drinks and tobacco)
• predominantly non-food stores (for example, non-specialised stores, such as department stores, textiles, clothing and footwear, household goods and other stores)
• non-store retailing (for example, mail order, catalogues and market stalls)
• stores selling automotive fuel (petrol stations)

Figure 2 shows that for every pound spent in the retail industry:

• 40 pence was spent in food stores
• 43 pence in non-food stores
• 8 pence in non-store retailing
• 9 pence in stores selling automotive fuel

Using these as weights, along with the year-on-year growth rates, we can calculate how each sector contributed to the total year-on-year growth in the quantity bought.

In April 2016 compared with April 2015, all 4 main retail sectors saw an increase in the quantity bought (volume) while all main sectors, except petrol stations saw an increase in the amount spent (value). The largest contribution in the quantity bought came from food stores while the largest contribution in amount spent came from non-store retailing.

In April 2016 compared with March 2016, 2 of the 4 main retail sectors (non-food stores and non-store retailing) saw an increase in the quantity bought (volume) while 2 of the 4 main sectors (non-food stores and petrol stations) saw an increase in the amount spent. The largest contribution for both quantity bought and amount spent came from non-food stores.

Table 5 shows how sales varied among different-sized retailers. It shows the distribution of reported change in sales values of businesses (from the RSI sample), ranked by size of business (based on number of employees).

Businesses with 40 to 99 employees saw the largest growth in the amount spent in April 2016 compared with April 2015 (28.8%). Businesses with 100 and over employees showed an increase of 2.0%.

More information on the performance of the retail industry by store type and size can be found in the Business Analysis dataset.

Figure 5 compares a rolling 3 month period with the same period in the previous year and highlights that the volume of retail sales started to grow strongly from mid-2013. The latest data show a slight decrease in the retail sales growth from 3.9% in the 3 months to March 2016 to 3.7% in the 3 months to April 2016. The rolling 3 month on 3 month a year ago growth in retail sales has averaged 3.8% since the start of 2016 which was lower than the 2015 average of 4.6%.

Three distinct periods emerge from Figure 5. Between April 2007 and July 2008, retail sales volumes were experiencing continuous growth, although to a different degree. Growth in inflation (Consumer Prices Index CPI) was lower than average weekly earnings over most of this period; which resulted in rising real earnings, an indicator of the purchasing power of consumers. Moreover, between April 2007 and July 2008, consumer credit increased by 8.8%, which may have been a factor driving retail sales growth.

However, between August 2008 and May 2013, the volume of retail sales fluctuated between periods of contraction and expansion, which may be partly explained by the economic climate over this period, and coincided with a reduction in consumer credit of 24.8%. Moreover, growth in average weekly earnings was lower than inflation over most of the period, which implies that earnings fell in real terms.

The third period shown in Figure 5 started in June 2013, when growth in volume terms began to increase notably, despite average weekly earnings growing at a slower rate than CPI until September 2014. Moreover, since June 2013, consumer credit has followed a broadly upward trend, growing by 16.6% between June 2013 and March 2016. Between June 2013 and April 2016, the price level (shown by the implied deflator) fell by 5.8%, coinciding with 11.9% growth in the volume of retail sales over this period. In addition, this upturn in spending has been accompanied by a decline in the savings ratio, from an average of 9.0% over the period 2008 to 2012, to an average of 5.3% over the period 2013 to 2015.

Figure 6 breaks down the growth in total retail sales into the contributions made by predominantly food and non-food stores (which includes department stores, other stores, clothing, and household goods), non-store retailing, and petrol, between April 2007 and April 2016. In the 9 year period, non-store retailing has, on average, made the largest contribution to growth and is the only component to have made a consistently positive contribution. In the most recent period, all 4 components have made positive contributions to growth, with predominantly food and non-food stores contributing the most, 1.5 percentage points and 1.0 percentage points, respectively. In the latest month, growth continues to be driven by a broad based increase in all 4 categories.

The only international estimate of retail sales available for April 2016 was published by the US Census Bureau on 13 May 2016. In its advanced retail sales estimates for April 2016, the amount spent in the US retail industry, including motor vehicles and parts and food services, increased by 1.3% compared with the previous month and increased by 3.0% compared with April 2015. Total sales for the 3 months to April 2016 were up 2.8% from the same period a year ago.

The latest estimates of the volume of retail trade across the European Union, from Eurostat for March 2016, show the seasonally adjusted volume of retail trade decreased by 0.5% in the euro area (EA19) and fell by 0.7% in the EU28 when compared with February 2016. Compared with March 2015, the retail sales index increased by 2.1% in the EA19 and by 2.4% in the EU28. Note that an accurate comparison cannot be made as Eurostat data are calculated on a 2010 = 100 basis, while data for Great Britain are calculated on a 2012 = 100 basis.