MNI 5 Things: Enthusiastic Shoppers Likely To Lift Q3 GDP

By Jamie Satchi and Laurie Laird

     LONDON (MNI) - The following are the key points from the ONS' retail sales

data published Thursday by the Office for National Statistics.

     - Retail sales rose unexpectedly in August, up 0.3% m/m after a revised

0.9% rise in July, confounding estimates of a 0.3% m/m fall. Analysis by MNI

ahead of the release  highlighted upside data surprises in each of the last two

Augusts.

     - The sector could fall by a record-large 3.6% in September and still leave

Q3 sales on par with the previous quarter, meaning the sector is poised to add

to Q3 GDP.

     - Strength was broad-based with all but two of the main categories

recording growth on a m/m basis. The star was household goods, up 4.5% m/m and

10.8% y/y, boosted by heavier discounting than normal. As expected, food sales

moderated, while the reversal of promotions means clothing sales also fell on

the month.

     - Online sales continued to account for a significant share of total

retailing, unchanged on July's record high 18.2%, suggesting that it wasn't just

barbecues and football keeping shoppers indoors that led to elevated activity.

     - Price moderation could be supporting the recent uptick in sales activity.

The ex-fuel retail price deflator has steadily declined in recent months, down

from highs of 3.0% late last year to 1.3% this August. Household good prices,

for instance, grew by just 0.4% y/y last month -- the lowest since November 2016

-- likely playing a key role the 10.8% y/y surge in volumes.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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