Retail sales in the UK bounced back strongly in April 2025, with volumes rising by 1.2 percent, 0.9 percent above the consensus forecast and the sharpest monthly increase since mid-2021. This momentum caps four consecutive months of growth, marking a 5.0 percent increase year-over-year, some 1.5 percentage points above the consensus forecast. Food retailers were the winners, with a 3.9 percent surge attributed to favourable weather boosting supermarket and specialty store activity. However, non-food stores saw a modest dip of 0.7 percent, reflecting a cool-off after a robust performance in March, especially in clothing and leisure categories.

Despite the digital shift in recent years, online spending slipped slightly by 0.3 percent month-over-month, nudging online sales' share down to 26.8 percent. Still, annual growth in online value sales remained healthy at 6.1 percent, signalling sustained consumer appetite for digital channels. Notably, sales volumes have now exceeded pre-pandemic levels, suggesting renewed consumer confidence.

The retail sector's resilience, particularly amid inflationary pressures, hints at a cautious but strengthening recovery, rooted in weather-driven footfall, seasonal demand, and tentative shifts in consumer sentiment. The latest update takes the UK RPI to 38 and the RPI-P to 28, meaning that economic activities continue to stay well ahead of market consensus in the UK.

The consensus sees retail sales up 0.3 percent on month and up 3.5 percent on year.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The data include all internet business whose primary function is retailing and also cover internet sales by other British retailers, such as online sales by supermarkets, department stores and catalogue companies. Headline UK retail sales are reported in volume, not cash, terms but are available in both forms. The data are derived from a monthly survey of 5,000 businesses in Great Britain. The sample represents the whole retail sector and includes the 900 largest retailers and a representative panel of smaller businesses, including internet sales. Collectively, all of these businesses cover approximately 90 percent of the retail industry in terms of turnover.

With consumer spending a large part of the economy, market players continually monitor spending patterns. The monthly retail sales report contains sales data in both pounds sterling and volume. UK retail sales data exclude auto sales.

The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps apparel sales are showing exceptional weakness but electronics sales are soaring. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.