REPEAT:China Aug Retail Sales Growth Ebbs Despite Online Surge

Repeats Story Initially Transmitted at 04:03 GMT Sep 14/00:03 EST Sep 14

     BEIJING (MNI) - Retail sales in China saw lower-than-expected growth in

August as sales in major sectors with the largest retail volumes all slowed

compared with July, according to data released by the National Bureau of

Statistics on Thursday.

     Retail sales grew 10.1% to CNY3.033 trillion in August on a yearly basis,

the slowest growth rate since 9.5% growth in the January-February period, and

the lowest single-month increase since last October, when it was also 10.1%.

January and February months are combined for statistical purposes because of the

Chinese New Year holiday, which fell this year in late January. 

     August retail sales also came in 0.4 percentage points lower than the 10.5%

median growth forecast of the 19 financial institutions that comprise the MNI

survey.

     For the January to August period, retail sales rose 10.4% to CNY23.2308

trillion compared with the same period last year, which was flat with the 10.4%

gain in the January to July period.

     The August deceleration was mainly due to slowing sales in three major

retail sectors. Vehicle sales grew at 7.9% in August to CNY353.3 billion, lower

than the 8.1% rise in July. Catering revenue grew 10.7% to CNY336 billion in

August, 0.4 percentage points lower than the 11.1% growth in July. Oil and

related product sales climbed 4.5% to CNY165.6 billion, compared with 5.6%

growth in July.

     Retail sales from January to August were also negatively affected by growth

slowdowns in the the catering and oil and related products categories. Catering

sales slowed 0.1 percentage points to 11.1% compared with the January to July

period, and oil and related products slowed 0.7 percentage point to 9.1%.

     The decelerations of retail sales both on a y/y and year-to-date basis came

despite consumers largely upgrading their sporting and entertainment equipment

as well as mobile phones and other telecommunications devices, NBS spokeswoman

Liu Aihua said at a press conference Thursday. She said sports and entertainment

equipment experienced a strong sales growth of 14.9%, while telecommunication

product sales also edged up 12.2%.

     In contrast to the deceleration of overall retail sales, online retail

sales continued to see robust growth, spotting year-to-date growth of 34.3%. It

was the highest year-to-date reading so far this year, and 0.6 percentage point

higher than the 33.7% growth in the January-July period, and much stronger than

the 26.2% average growth in the online sector last year. 

     Deng Haiqing, the chief economist at Jiuzhou Securities, said in a note

Thursday that the low growth rate of retail sales in August was mainly due to a

slowdown in food-related categories. He warned that this could mean a structural

problem in China's consumption habits. 

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com