MNI DATA ANALYSIS: UK Oct Retail Slump on Fuel, House Goods>

-UK Oct total sales -0.5% m/m, +2.2% y/y in Sept

-UK Oct non-fuel sales -0.4% m/m, +2.7% y/y in Sept

-UK Oct retail prices +1.6% y/y; lowest since December 2016

-UK Q3 sales unchanged at +1.2% q/q; to add 0.06pp to GDP

By Laurie Laird, Jamie Satchi and Jai Lakhani

     LONDON (MNI) - Retail sales volumes slumped in October, dampened 

by falling fuel purchases and a plunge in household good sales. 

     Sales volumes decreased by 0.5% between September and October, 

falling well short of the median MNI median forecast of a 0.2% increase. 

On an annual basis, retail sales increased by 2.2%, compared to the MNI 

median gain of 3.0%. 

     September sales were revised to show a 0.4% monthly decrease and a 

3.3% annual gain, better than the originally-reported 0.8% monthly slump 

and 3.0% yearly improvement. 

     But that wasn't sufficient to lift third quarter sales growth, 

which matched the initially-reported 1.2% gain. 

     The retail sector, which accounts for 5.4% of total output, added 

0.06 percentage points to the first calculation of third quarter gross 

domestic product. 

     Fuel prices rose by 0.6% between September and October, or by a 

11.4% annual pace, the 26th consecutive year-on-year increase. That 

dampened fuel sales by 1.2% in October, or by 1.8% over the same period 

of last year. 

     Household good sales declined by a monthly pace of 3.0% in October, 

after strong promotion-led sales in previous months, according to a 

National Statistics official. The official saw no discernable link 

between the slowing housing market and the drop in household good sales. 

     Activity at predominantly-food retailers, which comprises 39% of 

total sales, rose by 0.4% last month, with specialised stores reported 

unusually-strong demand for holiday food items. A National Statistics 

official suggest that a trend toward earlier Christmas buying may be 

distorted by seasonal adjustment factors in months to come. 

     The implied price deflator rose by 1.6% in the year to October, 

down from 1.8% in September, the smallest rise since December of 2016. 

Excluding fuel, the deflator increased by just 0.6%, lowest since 

January of 2017. 

     Excluding fuel, sales fell by 0.4% last month, or by 2.7% compared 

with October of 2017, above/below the MNI median forecast of a 0.2% rise 

on the month and a 3.2% annual gain. 

     September non-fuel sales were also stronger than originally 

reported, falling by a revised 0.3% from August and increasing by 3.5% 

over September of 2017. Excluding fuel, sales growth was originally 

reported as down 0.8% between August and September and a 3.2% gain over 

the ninth month of 2017. 

     Internet sales -- in value terms -- rose by 1.2% between September 

and October, reversing two months of decline, or by 12.6% over October 

of 2017. That took on-line sales to 18.0% of all transactions, up from 

17.7% in September. 

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

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