UK retail sales extend slump
LONDON: UK retail sales volumes dropped for a fifth month in a row during September, official data showed Friday, as the country suffers supply constraints and high prices. Sales volumes dropped 0.2 percent last month from August, the Office for National Statistics said in a statement revealing the longest retreat on record.
“Household goods were the main driver of... (September’s) decline, with a fall of nearly 10 percent,” noted ONS economic statistics director Darren Morgan. “Despite the lifting of (lockdown) restrictions, in-store retail sales remain subdued, with many consumers still opting to shop online.”
Although sales of petrol surged in late September as drivers rushed to fill up their tanks, a UK fuel-shortage crisis likely meant consumers visited stores only for necessities, analysts said.
“Whether the products aren’t available, the price tag is too high, or shoppers have simply finished fettling with their home decor, non-food sales pulled down September’s figures,” added AJ Bell financial analyst Danni Hewson. “Furniture stores have been warning for months that big ticket, big size items have been caught up in the shipping crisis and that seems to have worked its way through to consumer sales.”
The UK is facing delays to the shipping of goods owing to an acute shortage of lorry
drivers. Helen Dickinson, chief executive of the British Retail Consortium, said UK retailers will be concerned “just as they begin their preparations for the all-important Christmas period” which last year was disrupted by a pandemic lockdown.
This time around, the run-up to the festive season has been affected by supply disruptions as economies reopen from lockdowns. Nevertheless, UK private sector business activity expanded at the fastest pace in three months in October, a key survey showed.
Growth was however accompanied by an unprecedented rise in inflationary pressures due to higher wages and supply chain costs, according to the survey from IHS Markit and the Chartered Institute of Procurement and Supply. Britain is meanwhile forecast to see an interest rate hike from the Bank of England as soon as November to help dampen inflation, which could force consumers to cut spending ahead of Christmas. The BoE’s new chief economist Huw Pill said in an interview with the Financial Times on Thursday that the UK annual inflation rate risks shooting above 5.0 percent in the coming months from 3.1 percent currently.
British annual inflation cooled slightly in September but remained close to a nineyear peak, data showed earlier this week. The rate fell to 3.1 percent from 3.2 percent in August, which was the highest level since early 2012.
High inflation is weighing on companies and consumers globally, while rate tightening is used by central banks to try and dampen price rises.—AFP