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UK retail sales: what the analysts say

UK retail sales slipped in August, as consumers preferred to watch the Olympics rather than splash the cash.

Overall sales including fuel fell by 0.2%, giving an annual rise of 2.7%. Online sales were particularly hard hit, according to the Office for National Statistics, but retailers of sporting goods reported strong demand for soccer shirts ahead of the start of the new football season.

James Knightly, ING Bank
UK retail sales for August fell pretty much in line with expectations, dropping 0.2% on the month (-0.3% consensus). [Online sales] fell 6.7% month on month with respondents suggesting they suffered through people watching the Olympics on television rather than surfing the net and making impulse purchases. While today's report does show an overall fall, the reasons behind it are largely down to one-off factors. With employment posting strong gains and inflation edging lower we are hopeful of a return to positive, albeit low, retail sales growth in the next few months.

Howard Archer, IHS Global Insight
The August retail sales indicate that for all its many virtues, the Olympic Games appears to have hindered rather than helped retail sales. Looking ahead, it seems likely that retail sales will remain muted overall in the near term at least. Consumers still face serious headwinds that are limiting their willingness as well as their ability to spend.

David Tinsley, BNP Paribas
We would not interpret the fall in sales in the release as being too bad a result. The British Retail Consortium and CBI surveys on the retail sector had already suggested a possibly worse decline and the impact of the Olympics might, on anecdote, have been expected to have depressed sales even more. Indeed the three-month on three-month rise in retail sales excluding fuel is still a very pleasing 1.0%, while including fuel still leaves it at 0.6%. The level of retail sales is still hovering around considerably higher levels that it averaged in 2011, indicating there has been some more momentum to consumer spending recently.

Ross Walker, RBS
Overall demand is still soft, but the retail industry is still holding up. We can expect positive growth in the third quarter. Insofar as it tells us about broader household spending, perhaps it's instructive, people are still feeling the pinch.

Source : The Guardian

21 September 2012
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