August Retail Sales Preview - 0700BST 18/9/20

BBG : 0.7%m/m; +2.7%y/y; Prev (Jul): +3.6%m/m, -1.4%y/y

Ex. Fuel: BBG: +0.5% m/m, +4.2% y/y; Prev (Jun): +2.0% m/m, +3.1% y/y

• As the reopening effect fades, the increase in sales is likely to slow further in Aug and markets expect sales to edge up by 0.7% m/m in Aug after they rose 3.6% in Jul.
• Retail sales plunged in Apr (-18.2%) before they already recovered sharply in May (+12.2%) and saw another double-digit growth rate in Jun (+13.9%).
• Sales in predominantly food stores fell 3.1% in Jul after two consecutive months of growth, while sales in non-food stores rose again sharply by 10.0%.
• Online sales remained elevated in Jul at 52.9% y/y, while m/m sales eased 7% following seven months successive growth.
• Consumer sentiment remained unchanged since Jul and the Gfk survey noted that households are particularly concerned about unemployment due to the end of the furlough scheme in Oct.
• The major purchases index edged up but remained in deeply negative, which bodes ill with future spending.
• The BRC reported another increase in total as well as like for like sales in August compared to a year ago.
• However, the report noted that retailers in city and town centres are still struggling due to low footfall as office workers have not yet returned.