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MNI (London)
Repeats Story Initially Transmitted at 16:11 GMT May 23/12:11 EST May 23
--Analysts Tend to Underestimate UK April Retail Sales
By Jai Lakhani
     LONDON (MNI) - The UK's April retail sales data print, due Thurs, will
reveal if the sector managed to rebuild after March's weather induced slide in
sales. MNI median expectations, taken from a poll of analysts, look for a 0.9%
m/m rise in total sales volumes and flat growth m/m in ex-fuel volumes.
         Apr Retail Sales  Apr Retail Sales  Apr Retail Sales   Apr Retail Sales
           Incl. Petrol %    Incl. Petrol %    Excl. Petrol %     Incl. Petrol %
                      m/m               y/y               m/m                y/y
Median                0.9               0.2               0.0                0.4
Prior                -1.2               1.1              -0.5                1.1
     Ahead of the release, we outline five themes for particular attention.
     1) Analysts Pessimism in April: April tends to be a month where analysts
are culpable of under-estimating headline retail sales. The y/y figure for April
is on average under-estimated by 1.51 percentage points. Given, Bloomberg
consensus estimates point to a 0.2% y/y figure for April, an under-estimate of
the same nature would be warmly received.
     2) MNI Median Estimate may be base effect: Growth in April retail sales is
forecasted at 0.2% y/y, sharply down from 1.1% in March. Although there wasn't a
noticeable Easter boost this March, a base effect from a strong April last year
could be driving the low forecast. Last April, retail sales grew by 2.6% m/m,
driven by household goods (5.1%), other stores (6.6%) and non-store retailing
     3) Weather distorted March could mean strong rebound in April: March's
"Beast from the East" contributed to retail sales volume y/y fall to 1.1% after
February's 1.5%. The m/m fall was also fairly large with March seeing a decline
in volumes by 1.2% compared to growth of 0.8% in February. The last comparable
month of poor weather was in January 2010. Comparing this with February 2010
shows a rebound in the y/y figure by 6.9% and the m/m figure improved by 4.7%.
Whilst the weather in January 2010 was considerably worse, the upward effect in
April from weather in March cannot be ignored.
     4) Surveys give mixed bur overall negative message: The survey data for
April does not support the notion of a bounce back in April for retail sales.
The BRC showed retail sales growth falling to a record-low in April and
contracted 3.1% on the year in April, compared to a 6.3% surge in April 2017.
Furthermore, the CBI retail sales growth recovered in April after a -8 figure
for sales volume in March was followed up with -2 in April. Whilst an
improvement from March, the figure was still below February suggesting a gloomy
picture for retail sales.
     5) Visa Data Points to Subdued Confidence. Retail weakness was also
highlighted in the April Visa UK Consumer Spending Index. Seasonally adjusted,
spending fell 2.0% y/y in April, broken down into a sharp 5.4% fall in
face-to-face sales, the biggest fall in six years, and a smaller 0.1% drop in
eCommerce sales. The report highlighted muted appetites to spend on
discretionary goods, with spending on furniture, electrical appliances and
recreational activities all weak, suggesting confidence remains weak despite the
recent uptick in real wages.
--MNI London Bureau; tel: +44 203-586-2225; email:
MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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