UK retail sales post modest rise

21 July 2011 Last updated at 11:30 GMT Retail analysts say shops have introduced their summer sales earlier than usual Retail sales recovered slightly in June as stores started their summer sales early to attract customers, official figures have shown.

Like-for-like sales excluding petrol were 0.8% higher than May, said the Office for National Statistics (ONS). Compared with June 2010, sales were up 0.2%.

It comes after sales declined by a revised 1.5% in May from April.

Marks and Spencer is one of the main retailers to have already cut prices.

'Under pressure'

Philip Shaw, economist at investment group Investec, said: "The retail sales figures were much as we expected, with a strong bounce back in June partly reflecting early summer sales.

"That really implies that sales could fall back in July because of the change in timing of High Street discounting."

Mr Shaw added: "The overall assessment is that consumer spending remains under pressure."

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At best, the majority of retail outlets are limping along and it is only a matter of time before more fall by the wayside”

End Quote Brian Johnson Insolvency practitioner The official ONS figures come a week after the British Retail Consortium said early summer price discounting had slowed the rate of sales decline on the High Street.

The continuing weakness in the retail sector comes after a number of well-known names have gone into administration.

Firms that have had to call in administrators in recent months include Jane Norman, Habitat, Focus DIY, Homeform, TJ Hughes and Oddbins.

Other retailers such as Carpetright, HMV, Thorntons, JJB Sports, Comet and Blacks Leisure have shut stores.

Brian Johnson, an insolvency practitioner at chartered accountants HW Fisher, said the retail sector was "one of the busiest areas of our business right now".

He added: "At best, the majority of retail outlets are limping along and it is only a matter of time before more fall by the wayside."

Income squeeze

The weakness in the retail sector comes as consumers are struggling with higher fuel and food bills, and job insecurity.

ONS figures last month showed that UK households have seen the biggest fall in their disposable income for more than 30 years.

It said that in the year to the end of March real incomes - adjusted for inflation - fell 2.7%, a fall not seen since 1977.

It comes as UK petrol prices are at near all-time highs, and three of the big six energy companies have said they will be raising their electricity and gas bills in the coming months.

At the same time, the latest ONS data showed that food prices last month were 5.8% higher than June 2010 - the biggest annual rise since March 2009.

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Japan's retail sales recovering

28 June 2011 Last updated at 01:03 GMT Japanese consumers have refrained from spending in the aftermath of the earthquake and tsunami Retail sales in Japan fell less-than-forecast in May as the country starts to recover from the 11 March earthquake and tsunami.

Retail sales fell 1.3% in May compared with the same month last year, according to the latest government data.

However, compared with the previous month, retail sales rose by 2.4%.

Analysts said that the numbers were an indicator that the Japanese economy was starting to recover.

"The pace of decline has slowed, reflecting a quick recovery from the damage to supply chains," said Hioshi Miyazaki of Shinkin Asset Management Company.

Natural factor

While improving supply chain conditions have played their part in better output from Japanese factories, analysts said that natural factors such as the weather was also playing a part.

"Summer clothing seems to have sold well due to the hot weather in May," said Junko Nishioka of RBS Securities.

"This trend may continue in June and beyond," she added.

Mari Iwashita of SMBC Nikko Securities added that a change in weather may have a positive affect, not just on retail sales but also on other areas of the economy.

"A hot summer could result in more spending, especially with corporations allowing employees to take longer summer holidays." said Mr Iwashita.

"The picture may not be bad if summer bonuses are spent domestically, such as on travel," he added.

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US retail sales slip back in May

14 June 2011 Last updated at 21:51 GMT Car sales fell at their sharpest rate in more than a year US retail sales fell in May for the first time in almost a year, due in large part to a sharp drop in car sales, official figures have shown.

Sales fell 0.2% from the month before to $387.1bn ($236.2bn).

Car sales fell 2.9%, partly due to supply issues caused by March's earthquake in Japan.

Despite the fall, analysts said sales were better than expected and highlighted the increased spending against a year earlier.

"Although autos posted their largest decline since February of last year, car sales are still up 5.4% from May 2010," said Vimombi Nshom at IFR Economics.

"Overall, sales are 7.7% higher than total transactions conducted 12 months ago."

Taking car sales out of the equation, retail sales actually rose by 0.3% on the previous month, the Commerce Department figures showed.

Weak recovery

The sales figures were welcomed by the markets, with the main Dow Jones index closing up 123.1 points, or 1.0%, at 12,076.1.

Investors viewed the data as a welcome relief from some poor recent economic statistics.

Last week, the Federal Reserve said growth had appeared to slow in several regions across the US in May.

The manufacturing sector was notably sluggish, the Fed said, due to the disruption to supply chains from Japan's earthquake.

Earlier this month, official data showed that US employment growth slowed sharply in May, with only 54,000 net new jobs added during the month. Markets had expected a rise of 150,000.

The US housing market also remains depressed.

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Royal wedding boosts retail sales

19 May 2011 Last updated at 14:38 GMT The royal wedding gave people an extra day in which to shop UK retail sales rose by more than expected in April, boosted by the extra public holiday for the royal wedding, and the warm weather.

Sales last month were 1.1% higher than March, said the Office for National Statistics. Demand rose most for clothing, footwear and food products.

It was the biggest rise in retail sales for April since 2002.

But economists warn the big rise in sales is likely to be a one-off, and that consumer spending remains muted.

Weaker May?

Analysts were prepared for the extra public holiday to give retail sales a boost last month, but expected them to rise by only 0.8%.

George Buckley of Deutsche Bank said: "On the face of it they are stronger numbers. It's looking a little better, but I suspect we will get some pay-back in May."

April was the warmest on record in the UK, and this appears to have lifted sales of clothing and footwear, which rose by 3.2% as people bought summer items. Food sales were up 2.2%.

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The strong retail sales figures for April strengthen hopes that the economy has continued to grow in the second quarter of the year”

End Quote David Kern BRC chief economist Howard Archer, chief UK and European economist at IHS Global Insight, also said the April figures should be treated with caution.

"While welcome, we strongly doubt that the 1.1% jump in retail sales volumes in April is a sign that the consumer is roaring back to life," he said.

"Rather, what it suggests is that pressurised consumers need a particularly favourable set of circumstances to part with their cash."

Last week, the British Retail Consortium (BRC) also said that the warm weather and extra public holiday had boosted sales in April, which it reported had risen 5.2% on a like-for-like basis.

The BRC said champagne and garden furniture were among the items most in demand as the nation celebrated the royal wedding and enjoyed the sunshine.

The British Chambers of Commerce (BCC) said the latest official retail figures were "encouraging".

BCC chief economist David Kern added: "The strong retail sales figures for April strengthen hopes that the economy has continued to grow in the second quarter of the year."

A separate report by the CBI business organisation said that growth in British factory orders had accelerated more than expected in May.

The CBI's monthly industrial trends survey also found that the level of inflation faced by factories had eased to its lowest level since December of last year.

However, the latest figures from the UK car industry show that it has been affected by a reduction in the supply of parts caused by the earthquake and tsunami in Japan.

The Society of Motor Manufacturers and Traders said production in April was 7% lower than a year earlier.

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