MNI 5 THINGS: UK Feb Sales Pickup Seen After Sluggish Dec/Jan

--UK February Retail Sales Data Due For Release Thurs

     LONDON (MNI) - The UK's February retail sales data print, released Thurs,

will help us see whether the sector gained any momentum after a sluggish festive

period. MNI median expectations, taken from a poll of analysts, look for a 0.5%

m/m rise in total sales volumes and a 0.7% m/m rise in ex-fuel volumes. 

                Feb Retail

                     Sales  Feb Retail Sales  Feb Retail Sales  Feb Retail Sales

              Incl. Petrol      Incl. Petrol      Excl. Petrol      Incl. Petrol

                     % m/m             % y/y             % m/m             % y/y

--------------------------------------------------------------------------------

MNI

Median                +0.5              +1.4              +0.7              +1.5

Prior                 +0.1              +1.6              +0.1              +1.5

     Ahead of the release, we outline five themes for particular attention.

     - Analysts, Surveys Point to An Unconvincing Rebound. 

     Total sales volumes are only expected to rise modestly in February (MNI

median: 0.5% m/m) following a pretty dismal festive period. The sales volume

index in the February CBI moderated for the third month in a row to +8, the

lowest result since May, while the month's BRC survey continued to report

household finances restraining spending appetites. Volumes barely rebounded in

January, up 0.1% m/m, after sinking 1.4% m/m in December. 

     - February Tends to Deliver Upside Surprises.

     There is a tendency for the February m/m total sales volumes data to come

in better than expected. In six of the past eight occasions the actual February

result has overshot the Bloomberg consensus, including the last three (2015,

2016 and 2017). Over the eight years the average upside surprise was +0.86pp

while the average downside surprise was considerably smaller at -0.16pp. The

February 2018 MNI median for total m/m sales growth of 0.5%, 0.2pp above the

Bloomberg consensus of 0.3%, may therefore be a better guide for Thursday's

outcome.         

     - Feb Data Won't Include Snow Effects. 

     The Office of National Statistics surveyed businesses between January 28

and February 24 meaning the adverse weather conditions encountered by much of

the country in the final few days of the month will only show up in the March

dataset.  

     - Non-Food Sales On the Up? 

     Non-food store sales have started to pick up - volumes growth, on a 3m y/y

basis, has rose for the second month in a row in January after falling the

previous four. This recent trend has coincided with a moderation in food prices

and tentatively suggests consumers may be slightly increasing their

discretionary spend as essential items become more affordable. The food price

deflator, although above the 3.0%-mark for the last four months, decreased for

the first time since July in January.  

     - Real Wages Trending Higher. 

     Wednesday's labour market data showed total real AWE ending a nine-month

stint in the red, settling flat in the three months to Jan. We would expect this

partial restoration to extend into next month, as the applied CPI rate drops to

2.7%, and the months to come as inflation moderates and higher wage settlements

filter into the data. Survey data suggest that consumers want to spend but just

don't have the financial capacity right now. So, if purchasing powers were

restored somewhat in coming months, it could set up a retail sales boost.     

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

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