MNI DATA ANALYSIS: UK Sep Retail Sales Lower; Q3 to Lift GDP>

-UK Sep total sales -0.8% m/m, +3.2% y/y

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

-UK Sep non-fuel sales -0.8% m/m, +3.2% y/y

-UK Sep retail prices +1.8% y/y, joint-lowest since Dec 2016

By Laurie Laird and Jamie Satchithanantham

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

by a sharp fall in supermarket sales, but a strong performance in late 

summer leaves the sector poised to contribute positively to gross 

domestic product in the third quarter. 

     Sales volumes fell by 0.8% between August and September, falling 

well short of the median MNI median forecast of a 0.4% decline. On an 

annual basis, retail sales increased by 3.0%, compared to the MNI median 

gain of 3.5%. 

     July sales were revised to show a 0.4% monthly increase and a 3.4% 

annual gain, slightly higher than the originally-reported 0.3% monthly 

increase and 3.3% yearly improvement. 

     That lifted retail sales by 1.2% in the third quarter, which could 

add 0.06 percentage points to GDP, according to a National Statistics 

official. The retail sector accounts for 5.4% of total output. 

     Transactions at predominantly food retailers, which comprise 39% of 

total sales, slumped by 1.5% last month, the biggest fall since October 

of 2015, with weak supermarket sales accounting for much of the decline. 

     The implied price deflator rose by 1.8% in the year to September, 

the twenty-third straight increase, but below the peak of 3.3% recorded 

in September of 2017, and the smallest rise since January of 2017, when 

the deflator increased by an equal magnitude. 

     Fuel prices accounted for much of the acceleration in retail 

inflation, jumping by an annual rate of 10.3% in line with the recent 

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

just 0.9%, also the smallest rise since January of 2017. 

     Excluding fuel, sales slipped by 0.8% last month, rising by 3.2% 

over September of 2017, below the MNI median forecast of a 0.4% fall on 

the month and a 3.8% annual gain. 

     August non-fuel sales were stronger than originally reported, 

rising by a revised 0.5% from July and by 3.6% over August of 2017. 

Excluding fuel, sales growth was originally reported as up 0.3% between 

July and August and a 3.5% gain over the ninth month of 2017. 

     Rampant growth in online sales shuddered to a halt in August, with 

internet sales -- measured by value -- declining by 2.5% m/m, the 

sharpest fall since August of 2015. On-line non-store retailing, which 

measures sales at internet-only shops, slumped by 4.5%, the biggest fall 

since August of 2015. 

     The September decline pushed internet sales down to 17.8% of total 

retail transactions from 18.0% in August and a record 18.2% in July. 

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

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