talking trade I
t’s amazing what a period of warm weather can do for sales! For the first time in quite a while there was some degree of correlation
between encouraging official figures and a feel- good factor in the real world. We saw retail up 2.1% in the three months to
June, which is the biggest increase for over three years. July followed on with a rise of 0.7% in the quantity bought compared with June, and up 3.5% on the year-ago period. Contrasting ONS statistics with the BHETA GfK
Quarterly POS index, it’s clear - from looking at the sectors contributing most to this overall rise - that the warm summer had a lot to do with the apparent upturn. In small electricals, for example, pick-up in air treatment and air cooling was evident, while the
Monday February 4 2019 THE NATIONAL MOTORCYCLE MUSEUM, BIRMINGHAM
WILL JONESHousewares Sector Director of the British Home Enhancement Trade Association (BHETA) Great summer; now let’s focus
biggest rise in the housewares sector was in barware, which was up 8.8%. Unsurprisingly, outdoor and seasonal was also in
growth, while for garden and leisure, sales of patio sets and barbecues were such that their impact turned falling sales figures into rising sales figures in the published results of at least one multiple retailer. Drill down into the detail, however, and the
weather - which has been such a positive for some - may not have done our sector quite so many favours overall. In fact, it may have masked the more serious issues at the heart of retail. Not that I’m knocking the very real positives of the last few months. For those who were able to take full advantage of the warm weather spike -
either by predicting it and investing in stock, or managing their supply chain effectively, or getting a promotional programme out into stores - huge congratulations. But my longer-term conclusion is that we could be in danger of seeing unusual or one-off phenomena such as the weather influencing our short-term view, while underlying issues continue to need addressing. As we get into autumn, we need to refocus on the changes in consumer behaviour and the consequent structure of our industry. In the end it’s all about understanding trends and
how consumers are changing the way they make their purchases. These are the two drivers which will fundamentally affect this sector. Sunshine is just lovely while it lasts!
Consumer Price Index July 2018 Rising prices for computer games and transport fares produced the largest upward contributions to change in the 12-month rate between June and July, although computer game prices tend to be highly variable from month to month. The upward effects were offset by falls in prices for clothing and footwear, and the removal of initial charges for investment in some unit trusts. Prices for clothing and footwear fell by 0.4% between July 2017 and July 2018: the first time the 12-month rate has been negative since October 2016. The Consumer Price Index (CPI) 12-month rate was 2.5% in July, up from 2.4% in June.
Retail Sales July 2018 In July, the quantity bought increased by 0.7% compared with the previous month, recovering from a decrease of 0.5% in June. When compared with the same month a year earlier, the quantity bought in July increased by 3.5% against the slower growth of 1.1% in July 2017. The quantity bought in non-store retailing showed strong growth both on the month and year-on-year at 4.9% and 16.9% respectively. Feedback from non-store retailers suggested that online promotions further encouraged sales, while non-food stores reported a reduction in footfall.
Spending online continued to increase to reach a new record proportion of all retailing at 18.2% in July, with strong growth in department stores also reaching a record proportion at 18.2%.
Mortgage Approvals June 2018 The number of mortgages approved for house purchase in the UK increased to a five-month high of 65,619 in June from an upwardly revised 64,684 in the previous
month and above market consensus of 65,500. Low and high value deposits are proving key drivers in the mortgage market. First time-buyers, along with other buyers putting down small deposits, accounted for 23.4% of approvals in June. But the proportion of buyers laying down high value deposits of 60% or more also increased, and now makes up 32.9% of approvals.
House Price Index June 2018 Average house prices in the UK increased by 3% in the year to June (down from 3.5% in May). 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 has been driven mainly by a slowdown in the south and east of England. The lowest annual growth was in London, where prices decreased by 0.7% over the year, down from negative 0.2%.
Labour Market April - June 2018 Estimates from the Labour Force Survey show that, between January to March 2018 and April to June 2018, the number of people in work increased, the number of unemployed people decreased but the number of people aged from 16 to 64 years not working and not seeking or available to work increased. The employment rate was 75.6%: unchanged compared with January to March 2018 but higher than for a year earlier (75.1%). The unemployment rate was 4%; it has not been lower since December 1974 to February 1975.
Construction Output June 2018 Construction output grew by 0.9% in Quarter 2 (April to June) 2018, recovering from a 0.8% fall in Quarter 1
(January to March). The quarter-on-quarter increase in construction output in Quarter 2 was driven by a 2.7% increase in repair and maintenance work, with all new work remaining flat. Following four consecutive months of contraction in the month-on-month series at the start of 2018, construction output increased by 1.4% between May and June; this follows an increase of 2.9% between April and May. The June month-on-month growth in construction output was driven predominantly by the continued growth in infrastructure new work, which increased by 9.2%.
Commodity Prices June 2018 Commodity prices were mostly higher in May, led by energy, which surged 7.4%. Non-energy commodities rose 0.1%. Grains rose 0.8%, metals and minerals 0.4%, and beverages 1.4%. Precious metals fell 2.1%, while fertilisers fell 1.1%.
Foreign Exchange Analysis Reuters - August 29 2018 Sterling held near a one-year low against the Euro on August 29 following days of aggressive selling, ahead of a rare mid-recess speech by Brexit Minister Dominic Raab. The dollar rose as relief about a US-Mexico trade deal gave way to concern among investors that the conflict over trade between the US and China was not about to end soon.
1 GBP = 1.10 EUR 1 GBP = 1.28 USD
Source: BHETA Economic Snapshot – August 2018
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September/October 2018
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