UK retail sales Preview: Football World Cup set to save the reputation of the UK economy growing

 

• The English squad playing the Football World Cup semi-final boost beer and BBQ consumption as the nation gets the football fever. 
• The UK retail sales are expected to rise 0.4% m/m in June with core retail sales excluding motor fuel sales seen rising 0.3% m/m.

The UK retail sales are expected to rise 0.4% over the month in June as warm weather and the English squad proceeding in the World Cup into the semi-final boosted beer consumption and general happiness. The core retail sales excluding motor fuel sales are expected to increase 0.3% m/m in June, the Office for National Statistics is expected to report on Thursday at 8:30 GMT.

Total retail sales are set to boost the economic growth in the second quarter after the exceptionally weak performance during the first three months of this year. While the average total retail sales growth rate in the first quarter of this year was -0.1% m/m, the average for the second quarter is expected to increase to 1.1% after retail sales rose 1.6% over the month in April and 1.3% over the month in May.

The UK retailers are expected to benefit mainly from the increased consumption related with Football World Cup that saw the English squad easily proceed into the final rounds ending in the World cup semi-final.

"Beer, barbeques and big TVs lifted June’s sales as warm weather and world cup fever gripped the nation. However, with consumers engrossed in the agony and ecstasy of each match, spending on many other items fell. In the end, June scored solid, but not sensational, sales,” Helen Dickinson, the chief executive at the British Retail Consortium (BRC) wrote in the June report. 

The early estimate of the UK retail sales from the BRT saw total retail sales rising 2.3% over the year in June with shopper spending 1.7% more in three months ending in June on food and 0.8% in three months ending in June on non-food items.

The UK retail sales are set the save the reputation of the UK economy picking strongly up in the second quarter of this year after a weak performance in the first quarter. The improved economic outlook for the second quarter of this year was also voiced by the Bank of England Governor Mark Carney who said in his last public speech at the Northern Powerhouse Business Summit in Newcastle on July 6. Carney confirmed that the number of indicators of household spending and sentiment has bounced back strongly from what increasingly appears to have been an erratic weakness in the first-quarter including strong UK labor market and there is widespread evidence that labor market slack is largely used up. The latest UK labor market report confirmed solid performance as wages rose 2.7% y/y excluding bonuses and the unemployment stayed at the lowest levels since 1975.

Contributions to the UK retail sales rise in May 2018