Retail sales, Great Britain: April 2015

• Continuing a sustained period of year-on-year growth, retail sales in April 2015 are estimated to have increased by 4.7% compared with April 2014. This was the 25th consecutive month of year-on-year growth, the longest period of sustained growth since May 2008 when there were 31 periods of growth

• The underlying pattern in the data, as suggested by the 3 month on 3 month movement in the quantity bought, continued to show growth for the 26th consecutive month, increasing by 0.7%. This is the longest period of sustained growth since consistent records began in June 1996

• Compared with March 2015, the quantity bought in the retail industry is estimated to have increased by 1.2%. All store types except predominantly food stores showed growth

• Average store prices (including petrol stations) fell for the 10th consecutive month, falling by 3.2% compared with April 2014. The largest contribution to the year-on-year fall once again came from petrol stations which fell by 11.5%, the 20th consecutive month of year-on-year falling prices in this store type

• In April 2015, the amount spent in the retail industry increased by 1.8% compared with April 2014 and by 1.1% compared with March 2015. Non-seasonally adjusted data show that the average weekly spend in the retail industry was £6.9 billion, unchanged from the previous month and the April 2014 figure

• The value of sales made online increased by 3.7% compared with March 2015 and accounted for 12.2% of all retail sales in April 2015. Online sales increased by 13.1% compared with April 2014

• Revisions in this release were caused by the incorporation of late data. The earliest revisions point for current price, non-seasonally adjusted data was April 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 5 April 2015 to 2 May 2015. Unless otherwise stated, the estimates in this release are seasonally adjusted.

Users are reminded that the figures contained in this release are estimates 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.

The quality of the estimate of retail sales

Retail sales estimates are produced from the monthly business survey – 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 2015 was 63.1% of questionnaires, accounting for 86.2% 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 of this bulletin and in the quality tables (163.5 Kb Excel sheet) of this release.

It should be noted that we are continually working on methodological changes to improve the accuracy of the retail sales estimates; progress on these can be found on the ONS continuous improvement page on our website.

For different ways to access the data see the reference tables section on our website. These 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 2015, the quantity bought in the retail industry (volume) increased by 4.7% compared with April 2014. The amount spent (value) increased by 1.8%. In 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 3.2%. More information on how the implied price deflator is calculated can be found in section 3 of the background notes.

Amount spent in the retail industry

In the April 2015 4 week reporting period, the amount spent in the retail industry was £27.8 billion (non-seasonally adjusted). This compares with £34.3 billion in the 5 week reporting period for March 2015 and £27.8 billion in the 4 week reporting period for April 2014.

This equates to an average weekly spend in the retail industry of £6.9 billion, unchanged from the previous month and the April 2014 figure.

Figure 1 shows how the yearly growth in the 3 month average of retail sales volume was affected by the downturn and highlights the strong growth since 2013.

Three distinct periods emerge from Figure 1. In the years preceding the downturn, growth in retail sales was strong. Between April 2006 and April 2008, the volume of sales increased by 4.4%, or at an average annual rate of 2.2%. The rate of growth in consumer price inflation (CPI) was consistently lower than that of average weekly earnings over this period.

However, between April 2008 and April 2013, the volume of retail sales remained broadly flat, fluctuating between periods of contraction and expansion and, as a result, a similar volume of sales was recorded at the beginning and end of the period. This weakness is partly explained by the economic climate over this period. Growth in average weekly earnings was consistently lower than growth in the Consumer Price Index (CPI), which implies that earnings fell in real terms. Real household disposable income, which includes the effect of taxes and benefits, was also broadly flat over this period. However, the value of retail sales continued to grow, increasing by 11.4% over the period, reflecting rising prices between these dates.

The third period shown in Figure 1 starts in 2013, when growth in volume terms began to increase notably, despite weak growth in real household disposable income and average weekly earnings continuing to grow at a slower rate than CPI. The volume of retail sales in April 2015 was 11% higher than it was in April 2013; corresponding to an average annual growth rate of 1.1%, substantially faster than in the years preceding the downturn. Possible explanations for the strong growth in sales despite weak earnings growth were discussed in the March 2015 release, which looked at the difference between CPI and retail store prices.

Figure 2 highlights the store types that have seen the largest and smallest growth in the volume of sales since 2008.

Sales in the household goods store type were the most adversely affected by the economic downturn; the volume of sales fell by over 20% between 2008 and 2013 and have recovered more slowly than other store types (excluding fuel). These stores mainly sell products such as furniture and other durable goods. Sales of these goods are often seen as an indicator of confidence in the economy, as they tend to be expensive purchases. Household spending on consumer durables, which include these products, fell as a proportion of overall expenditure from 10.3% to 9.2% between 2008 and 2012. However, household goods stores have seen robust growth in the volume of sales in recent months and in April 2015 saw the biggest increase on the year for all store types, of 11.9%. The Index of Production (IOP) release for March 2015 shows that there has been a corresponding increase in the manufacture of furniture.

Figure 2: Volume of retail sales indexed to January 2008, for household goods, non-store sales and a swathe of other store types

Great Britain

Source: Monthly Business Survey - Retail Sales Inquiry - Office for National Statistics

Non-store retailing has seen the biggest increase in sales since 2008 and was not noticeably affected by the downturn. This is part of a longer trend, with an increasing number of people shopping on the internet. According to the Internet Access – Households and Individuals 2014 release, the number of adults that have reported buying goods and services online rose from 53% in 2008 to 74% in 2014. Over this period, the volume of sales from non-store retailing more than doubled.

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)

In April 2015, for every pound spent in the retail industry:

• 41 pence was spent in food stores

• 42 pence in non-food stores

• 7 pence in non-store retailing

• 10 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.

Figures 3 and 4 show the contribution of each sector to the quantity bought (volume) and amount spent (value) in the retail industry between April 2015 and April 2014.

In April 2015, all 4 main retail sectors saw an increase in the quantity bought (volume). The largest contribution came from the non-food stores sector.

In April 2015, 2 out of the 4 main sectors (non-store retailing and non-food stores) contributed to the increase in amount spent (value). The largest contribution came from the non-food stores sector.

Main points:

• in April 2015, all store types showed increases in the quantity bought compared with April 2014

• all store types except petrol stations showed increases in the amount spent year-on-year

• in April 2015, all store types saw falls in average store price compared with April 2014

More information on how average store prices are calculated can be found in the quick guide to retail sales or in the background notes.

In April 2015, the quantity bought in textiles, clothing and footwear stores increased by 8.7% compared with April 2014, the largest year-on-year increase since February 2010. Compared with March 2015, the quantity bought increased by 5.2%, the largest month-on-month increase since April 2011.

The amount spent in April 2015 increased by 6.2% compared with April 2014 and by 2.5% compared with March 2015. Store price inflation, as measured by the implied price deflator, decreased by 0.9%, the largest year-on-year fall since July 2010.

Figure 5 highlights these movements but showed that both the quantity bought and amount spent in textile, clothing and footwear stores, while having an underlying pattern of growth, are volatile. Further, it shows that as expected, there is a seasonal pattern to store price inflation, which coincides with end of season sales in these store types.

However, while the quantity bought can increase as prices fall or decrease as prices rise, there is no strong relationship between the two. One of the main factors influencing sales in this store type is unseasonal weather. Feedback from retailers suggests that the warmer than average weather in April 2015 resulted in an increase in the quantity bought as consumers brought forward the purchase of summer clothes.

Seasonally adjusted internet sales data are provided within this release. These seasonally adjusted estimates 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 2011=100.

Main points:

• average weekly spending online in April 2015 was £801.8 million; this was an increase of 13.1% compared with April 2014

• the amount spent online accounted for 12.2% of all retail spending, excluding automotive fuel, compared with 11.1% in April 2014

• online sales at textile, clothing and footwear stores increased by 16.5%, feedback suggests that sales increased due to a warmer than average April

Table 3 shows the year-on-year growth rates for total internet sales by sector and the proportion of sales made online in each retail sector.

Table 4 illustrates the mix of experiences among different sized retailers. It shows the distribution of reported change in sales values of businesses in the RSI sample, ranked by size of business (based on number of employees). It shows that businesses with 40 to 99 employees saw the largest growth in the amount spent, comparing April 2015 with April 2014. Businesses with 100 and over employees experienced growth of 0.6%.

More information on the performance of the retail industry by store type and size can be found in the reference table, Business Analysis (25.5 Kb Excel sheet) . This shows the extent to which individual businesses reported actual changes in their sales between April 2014 and April 2015. The table contains information only from businesses that reported in April 2014 and April 2015. Cells with values less than 10 are suppressed for some classification categories; this is denoted by "c". Note that “large” businesses are defined as those with 100 and over employees and 10 to 99 employees with annual turnover of more than £60 million. “Small and medium” businesses are defined as 0 to 99 employees.

The only international estimate of retail sales available for April 2015 was published by the US Census Bureau on 13 May 2015. In its advanced retail sales estimates for April 2015, the amount spent in the US retail industry, including motor vehicles and parts and food services, were virtually unchanged from the previous month but increased by 0.9% compared with April 2014. Total sales for the 3 months to April 2015 were up 1.5% from the same period a year ago.

The latest estimates from Eurostat for March 2015 of the volume of retail trade across Europe decreased by 0.8% in the euro area (EA19) and by 0.6% in the EU28 when compared with February 2015. Compared with March 2014, the retail sales index increased by 1.6% in the EA19 and by 2.5% in the EU28. It should be noted that an accurate comparison cannot be made as Eurostat data are calculated on a 2010 = 100 basis, while GB data are now calculated on a 2011 = 100 basis.