Retail sales rose by 1.2% in April, indicating resilient consumer activity despite economic uncertainties. This growth follows wage increases outpacing inflation and the effects of February's interest rate cuts, which have reduced borrowing costs. The favorable weather and seasonal spending during Easter contributed to the uptick. However, experts warn this increase might be temporary, potentially influenced by early spring conditions and previous discounting practices that affected profit margins. Additionally, shifting consumer behavior due to recent economic challenges may lead to caution in spending, especially in the housing market, requiring close monitoring.
Despite global and domestic economic uncertainty, consumer activity is proving resilient, driven by wage growth that is consistently above inflation.
While stock levels are generally better, there was a significant amount of discounting in the run up to Christmas, so although sales held to an extent, this was at the expense of profit margins.
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