MNI DATA ANALYSIS: UK June Retail Slumps But Will Lift Q2 GDP>

-UK June total sales -0.5% m/m, +2.9% y/y

-UK June non-fuel sales -0.6% m/m, +3.0% y/y

-UK Q2 retail +2.1% q/q, biggest rise since Q1 2004 

     By Laurie Laird and Jamie Satchithanantham 

     LONDON (MNI) - Uk retail sales volumes slumped in the month of 

June, despite an increase in World Cup-related food and drink sales, but 

the sector remained on track to contribute positively to second quarter 

gross domestic product. 

     Sales volumes fell by 0.5% between May and June, close to the MNI 

median forecast of a 0.6% decline. On an annual basis, retail sales 

increased by 2.9%, compared to the MNI median gain of 2.4%. 

     May sales were revised to show a 1.4% monthly increase and a 4.1% 

annual gain, better than the originally-reported 1.3% monthly rise and 

3.9% yearly improvement. 

     That pushed retail volumes 2.1% higher between the first and second 

quarters, the largest rise in a calendar quarter since March of 2001. 

Retail sales, which comprise 5.4% of economic activity, will add 0.11 

percentage point to second quarter GDP, according to a National 

Statistics official. 

     A 1.4% drop in non-store retailing, the biggest decline since last 

December, accounted for much of the decline. Internet sales volumes 

slipped by 0.4% in June, after a 4.9% surge between April and May, 

contributing to much of the weakness in the sector. On-line activity 

accounts for approximately half of non-store retailing, according to the 

official. 

     As a share of total spending, internet sales were unchanged on the 

month at 18.0%. 

     Supermarket sales rose modestly, as shoppers loaded up on food and 

drink during an unseasonably-warm month that also included the World Cup 

football tournament, extending strong gains in the previous two months. 

That left food-store sales up by 2.2% in the second three months of the 

year, the strongest calendar quarter since the beginning of 2001. 

     The implied price deflator rose by 2.3% in the year to June, the 

twentieth straight increase, but down from a 2.4% increase in May. 

     Fuel prices accounted for much of the acceleration in retail 

inflation, jumping by an annual rate of 11.2% in line with the recent 

rise in crude oil prices. Excluding fuel, the implied deflator rose by 

1.4, the smallest increase since February of 2017. 

     Excluding fuel, sales dropped by 0.6% last month, or rising by 3.0% 

compared with June of 2017, weaker than the MNI median forecast of a 

0.3% fall on the month and a 3.8% annual rise. 

     May non-fuel sales were also stronger than originally reported, 

rising by a revised 1.4% from March and increasing by 4.5% over April of 

2017. Excluding fuel, sales growth was originally reported as up 1.3% 

between March and April and up 4.4% over the fifth month of 2017. 

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,MABDS$]