GB: Retail Sales

Thu Aug 20 03:30:00 CDT 2015

Consensus Actual Previous Revised
Month over Month 0.4% 0.1% -0.2% -0.1%
Year over Year 4.3% 4.2% 4.0%

The third quarter got off to a shaky start. Retail sales inched up a less than expected 0.1 percent analysts expected a 0.4 percent monthly increase. On the year, sales were up 4.2 percent, slightly below the 4.4 percent expected. Sales were lifted by gains in household goods stores, but failed to rebound sharply from a setback in June.

Sales at household goods stores jumped 3.6 percent in July, boosted by in-store promotions. Volumes of electrical & household appliances increased by 5.1 percent between on the month while sales of furniture & lighting products improved 3.8 percent. Household goods vendors account for 8.3 percent of total retail sales volumes.

Excluding fuel, sales were up 0.4 percent last month and 4.3 percent when compared with the year before. Automotive fuel sales volumes slumped 2.6 percent, possibly due to a decline in driving over the school holidays. Activity at predominantly food retailers, which comprises 42 percent of total sales, declined 0.2 percent last month, for a 1.3 percent annual increase.

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.

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.