General dealers rise 2.3%y/y

  • As expected retail sales increased in July, due to base effects (fig 2). The increase, from a revised -0.9%y/y (-0.9%m/m) in June to 2.4%y/y (1.2%m/m) in July (fig.1) was better than the 0.8%y/y expected by Bloomberg consensus. Looking ahead, base effects are less favourable in August.

  • We note that all categories i.e. durable goods, semi-durable goods and non-durables goods increased in July (fig.3).

  • We have used food and Pharma as a proxy for non-durable goods, which rose from -1.2% in June to1.6%y/y in July: General dealers (food retailers) increased real sales 2.3%y/y in July (up from -1.0%y/y in June), contributing 0.9ppts to real retail sales growth (fig 6). Growth in pharmaceuticals remained constant at 0.9%y/y in July.

  • We have used textiles and clothing plus other retailers as a proxy for semi-durables, which rose even more dramatically, from -1.0%y/y to 4.2%y/y: Textiles and clothing, increased 4.4%y/y in July (up from -1.9%y/y in June) also contributing 0.9 percentage points to total retail sales growth. Other retailers’ sales grew from 1.0%y/y to 3.9%y/y, contributing 0.4ppts to total sales.

  • We have used furniture and appliances plus hardware as a proxy for durables, which rose less dramatically, from 0.4% to 1.7%y/y. Appliances and furniture contracted 0.3%y/y, an improvement on June’s -6.6%y/y contraction, while hardware sales growth fell from 5.3%y/y to 3.1%y/y.

  • Consumer and business confidence improved in Q2 (figs 7 & 8), although we are not quite sure what prompted the improvement considering falling household credit growth (fig 5) and rising goods inflation (fig 4). Rising interest rates should also inhibit confidence levels reverting to more ‘normal’ levels.

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