UK Retail Sales Hit High
The UK’s Confederation of British Industry has announced today that things look like they are on the up for retail sales in the UK and that figures in July have reached the highest they have been for the past half year. Retail sales were higher for 43% of those surveyed by the Confederation of British Industry in comparison with the previous year’s results. Only 26% were suffering from a loss on those figures.
High-street sales have been boosted by the exceptionally good weather in the UK (and we all know that that is a rarity in itself sometimes). But, that being said, if it’s only a question of weather, then we wouldn’t have shrinking economies in half the sunbaked countries in the world at the present time, would we? At least, good weather is not going to be a sustained-growth sparker.
Apparently, some areas, such as textiles and footwear were benefitting from the good weather and that was boosting sales but the feel-good expectations were not being felt in every sector of the UK economy (furniture saw a decline and so did food in July). If the weather is thought to be the reason why certain sectors of the economy in the UK were boosted, then surely food should have been part of the areas benefitting from that. But, the increase in sales in the footwear and clothing sector was the highest increase recorded since the start of surveys by the CBI (1983). Retailers that were polled in the CBI survey believed that sales would also increase in August in the UK (39%) and that was a vast improvement on last year’s figure of 29% of those polled that believed there would be a fall in sales.
Just a few days ago it was announced by the British government that the recovery had increased in the UK, which saw its economy expand by 0.6% (April to June 2013) at a time when analysts were suggesting that the country was going to nose-diving head-long into another recession. That figure was double the first quarter’s increase and came as a welcome sign that the UK economy is perhaps seeing some light at the end of the tunnel. But, transforming the heat-wave spending spree into durable growth is entirely another matter.
The CBI stated that an improvement in personal and family finances would be necessary to maintain growth and improve on these tentative beginnings adding: “A positive knock-on effect on retail sales from the royal baby has been mooted, but much more realistically, continued good weather and discounts will play a greater role in retail growth over the next month”. But “confidence will not bounce back fully until family finances improve significantly”.
Some of the key elements that were found in the survey were:
18% of those polled stated that sales were above average in terms of volume for the season.
37% had below-average sales for this time of year.
The balance was therefore -19% in terms of expectations of sales at this time of year. A balance of just -6% had been previously expected.
Clothing increased by +73%
Footwear was up by +17%
Grocery sales increased by +6%
Furniture and carpets were down by -73%
Food and drink fell by -43%
Motor traders stated that 64% of them had an increase in sales (this is the highest number since 2002).
The CBI polled 60 retailers between June 26th and July 16th regarding their sales.
How much the UK economy will maintain its increase in economic activity remains very much to be seen. The second quarter saw increases in agriculture, production and the construction industry. Construction grew by 0.9% in the second quarter of 2013 after a decline in Q1 2013 of 1.8%. Year-on-year figures from the second quarter 2012 show an expansion of the UK economy of 1.4%.
By comparison, the US’s retail-sales figures show for the last released statistics (June 2013) an annualized (monthly) increase of 6.85% and a yearly increase of 4.48%, currently amounting to $377.54 billion (up from $375.4 billion in May 2013). The Office for National Statistics in the UK’s latest figures released show that for June 2013there was an average weekly level of £6.9 billion being spent in the UK for all retailing in the country (up from £6.8 billion in May 2013).
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.