Video games saved British retail’s blushes in April – with High Street sales falling by less than expected thanks to a consumer ‘rush’ to buy interactive entertainment.
According to The Office for National Statistics, overall retail sales volumes fell for the second straight month in April, down 0.2 per cent from March – bringing the annual rate of increase down to 4.2 per cent from an upwardly revised 4.7 per cent in March.
However, the release of major titles in the month meant the slowdown beat analyst expectations.
"The ONS singles out the release of Grand Theft Auto IV and the Wii-Fit computer games" for the better than expected showing, said James Knightley of ING.
"However, away from this sales were fairly soft. Food store sales fell one percent month-on-month, while textile and clothing sales are falling at their fastest year-on-year rate since October 1998."
According to Reuters, analysts had forecast a monthly fall of 0.5 per cent in April – and March’s monthly figures were also revised to show a smaller decline.
Sterling rose and interest rate futures fell on signs the UK consumer could be proving more resilient in the wake of the credit crunch than other surveys and anecdotal evidence suggest.
April’s fall marked the first consecutive monthly decrease in sales volumes since January 2006 and the Bank of England has said it expects consumer spending to weaken, perhaps sharply, this year.
"There is plenty more downside for retail sales growth over the coming months," said Alan Clarke, an economist at BNP Paribas.
"However, it is becoming questionable whether this comes soon enough and severely enough to provoke further rate cuts before winter.