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MNI 5 THINGS: UK Sales Seen Lower As Snow Fall Beats Foot Fall

MNI (London)
--UK March Retail Sales Data Due For Release Thurs
     LONDON (MNI) - The UK's March retail sales data print, due Thurs, will
reveal if the sector managed to build on February's bounce in sales amid the
bout of ice and snow delivered up and down the country. MNI median expectations,
taken from a poll of analysts, look for a 0.8% m/m drop in total sales volumes
and a 0.5% m/m fall in ex-fuel volumes.
         Mar Retail Sales  Mar Retail Sales  Mar Retail Sales   Mar Retail Sales
           Incl. Petrol %    Incl. Petrol %    Excl. Petrol %     Incl. Petrol %
                      m/m               y/y               m/m                y/y
Median               -0.8              +1.8              -0.5               +1.1
Prior                +0.8              +1.5              +0.6                  +
Ahead of the release, we outline five themes for particular attention.
     - Calendar effects at full force. 
     The ONS' data does not cover calendar months and sometimes overlaps from
month to month as was the case in March. The survey period ran from February 25
to March 31 which meant it fully captured the exceptionally cold weather as well
as the build up to Easter (Easter Sunday fell on April 1 this year versus April
16 last year).
     - Analysts Tend to miss March result with no clear bias. 
     Analysts have found forecasting monthly sales growth in March tough, not a
total surprise given the volatility of the series, but missing just as many
times to the upside as to the downside since 2010 (see fig. 1). On the four
occasions since 2010 that analysts underestimated the March result the average
positive data surprise was a rather sizeable 1.0pp. When analysts overestimated
the March result during this time the average miss was a touch lower at -0.8pp.
This March, the MNI median looks for 'growth' of -0.8% m/m, a touch lower than
Bloomberg's consensus of -0.6%.
     - Spending weathered in March. 
     According to the Met office, the severe winter weather was comparable to
that in December 2010 - one of the coldest calendar months in the past century.
Then, sales volumes were down by a mammoth 2.0% on the month, setting a slightly
worrying precedent for March. CBI data, run over the first fortnight in March
when the snow-bite was most concentrated, showed a marked fall in its sales
balance but data from the BRC, spanning the entire month, was less pessimistic
(although not seasonally adjusted and likely flattered by Easter).
     - Anecdotal evidence of widespread weakness from Surveys. 
     Data from Barclaycard's monthly Spend Trends report predictably revealed
weakness in in in-store sales, particularly across weather-sensitive stores like
garden centres and DIY stores. Other than the expected pickup I food sales, VISA
spending data (non-seasonally adjusted) also came in soft, with household goods,
recreation and culture and transport and communication all recording solid y/y
     - Internet sales unlikely to have picked up all the slack. 
     Data from VISA also highlighted poor internet activity in March. Falling
1.2% y/y, eCommerce activity was down for the first time in 10 months and fell
by the fastest rate since in six years. While households will have been able to
place orders, logistical issues impacting transport and delivery will have
further hampered sales following poor in-store sales (the BRC reported shop
footfall down 6.0% y/y, a near-six-year low).
--MNI London Bureau; tel: +44 203-586-2225; email:
MNI London Bureau | +44 203-865-3812 |

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