talking trade


a royal wedding would have on the month’s figures. Lo and behold, May saw the quantity of retail sales up 1.3% with growth across all main sectors. Feedback from retailers suggests that a sustained period of good weather and royal wedding celebrations encouraged spending on food and household goods. All of this is positive. Yet the disparity


L


between the statistics and the relatively flat atmosphere in the High Street persists. My conclusion is that whatever traditional influencers like holidays, house moves, the weather and public celebrations do for the market, the real issues are the underlying structural changes in retail. Alongside inflexible leases, high rents and excess properties for many retailers, we’re


ooking at May’s economic statistics, I speculated about what effect two bank holidays, warm weather and


Monday February 4 2019 THE NATIONAL MOTORCYCLE MUSEUM, BIRMINGHAM


WILL JONESHousewares Sector Director of the British Home Enhancement Trade Association (BHETA) Embracing structural changes in retail


seeing a relentless shift towards online and the ‘experience economy’. This continued transition demands flexible operating models. Customer data, integrated ‘tech’ solutions such as social media, mobile apps, data platforms and augmented reality, are now the drivers of customer engagement and loyalty. The ‘experience economy’ will continue to


compete against the traditional retail culture. Retailers must create memorable experiences that add value to the customer journey - experiences for which customers are willing to pay a premium. This propensity to prioritise spending on


recreation and culture over commodity goods remains strongest across a younger consumer profile. Those ‘millennials’ that pundits have been discussing for a while are now aged between 20 and 34 - of an age to value the creation of a ‘home’, whether they own it


or not. To quote [global investment bank] Goldman


Sachs: “One of the largest generations in history is about to move into its prime spending years. Millennials are poised to reshape the economy; their unique experiences will change the way we buy and sell, forcing companies to examine how they do business for decades to come.” The housewares market needs to embrace these structural changes, incorporating digital and physical experiences into the customer journey as a matter of priority. These trends will only grow in importance as millennials become more commercially significant. So, while we can welcome transient boosts


to the market with open arms for the additional sales that they undoubtedly bring, we really need to be addressing more fundamental changes if we are to progress.


Consumer Price Index June 2018 The Consumer Price Index (CPI) including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.3% in June, unchanged from May. Rising prices for motor fuels, domestic gas and electricity produced the largest upward contributions to change in the rate between May and June 2018. Falling prices for clothing and games, toys and hobbies provided the largest downward effects. The CPI 12-month rate was 2.4% in June, unchanged from May.


Retail Sales June 2018 In the three months to June, the quantity bought in retail sales increased by 2.1% - the largest increase since February 2015, with growth across all main sectors. Food stores saw the strongest three-month on three- month growth since May 2001 at 2.2%, with feedback from supermarkets suggesting that the good weather and World Cup celebrations encouraged food and drink sales. But it was suggested by retailers that these factors resulted in a decrease in footfall in non-food stores; which, along with non-store retailing, resulted in a monthly decline of 0.5% in the quantity bought. Online sales as a total of all retailing remained unchanged at 18%. But online spending on clothing and footwear continued to achieve record proportions of online retailing, for the fourth consecutive month, at 17.5%.


Mortgage Approvals May 2018 The number of mortgages approved for house purchase in the UK increased to 64.526 in May: the most since January from an upwardly revised 62,941 in the previous month and above market consensus of 62,200. Mortgage lending increased by £3.86 billion in May


from a downwardly revised 3.79 billion gain in April and exceeding market expectations of £3.73 billion.


House Price Index May 2018 Average house prices in the UK increased by 3% in the year to May (down from 3.5% in April). This is its lowest annual rate since August 2013 when it was also 3%. The annual growth rate has slowed since mid-2016 and has remained under 5% (with the exception of October 2017) throughout 2017 and into 2018. This drop in UK house price growth is driven mainly by a slowdown in the south and east of England. The lowest annual growth was in London, where prices decreased by 0.4% over the year. This is the fourth consecutive month that London house prices have fallen over the year. The average UK house price was £226,000 in May. This is £6,000 higher than in May 2017 and unchanged from last month.


Labour Market March - May 2018 Estimates from the Labour Force Survey show that, between December 2017 to February 2018 and March to May 2018, the number of people in work increased, the number of unemployed people decreased and the number of people aged from 16 to 64 years not working and not seeking or available to work (economically inactive) also decreased. There were 32.40 million people in work, 137,000 more than for December 2017 to February 2018 and 388,000 more than for a year earlier. The employment rate was 75.7%, higher than for a year earlier (74.9%) and the highest since comparable records began in 1971.


Construction Output May 2018 Construction output continued its recent decline in


the three-month on three-month series, falling by 1.7% in May - representing the third consecutive decline in this series. The three-month on three-month decrease in construction output was driven predominantly by a fall in new work, which also fell for the third consecutive month, decreasing by 2.5% in May. Following a broadly negative start to 2018 in the month-on-month series, construction output showed signs of recovery in May, increasing by 2.9% compared with April. The month-on-month growth in construction output was in part driven by the recovery of private housing repair and maintenance work, which grew 7.3% in May following a weak start to the year.


Commodity Prices June 2018 Preliminary estimates for June indicate that the index decreased by 0.2% (on a monthly average basis) in SDR terms, after decreasing by 0.5% in May (revised). The rural and base metals sub-indices increased in the month, while the nonrural index decreased.


Foreign Exchange Analysis Reuters - July 23 2018 Sterling fell to a three-week low against a resurgent yen on July 23 after the Japanese currency received a boost from reports that the central bank was contemplating scaling back its stimulus. The British currency struggled to hold on to earlier gains against the dollar and fell 0.1% to $1.3115, although the pound was still up from the previous week’s 10-month low of below $1.30.


1 GBP = 1.12 EUR 1 GBP = 1.31 USD


Source: BHETA Economic Snapshot - July 2018


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