Con­sumers basked in warm weather and en­joyed royal wed­ding

The Gulf Today - Business - - FRONT PAGE -

LONDON: Bri­tish re­tail sales soared un­ex­pect­edly in May as con­sumers basked in warm weather and en­joyed the royal wed­ding, official data showed on Thurs­day.

Sales ral­lied 1.3 per cent last month af­ter a jump of 1.6 per cent in April, the Of­fice for Na­tional Sta­tis­tics said in a state­ment, adding that there was growth across all sec­tors.

“Feed­back from re­tail­ers sug­gested that a sus­tained pe­riod of good weather and royal wed­ding cel­e­bra­tions en­cour­aged spend­ing in food and house­hold goods stores in May,” the ONS said.

Mar­ket ex­pec­ta­tions had been for a more mod­er­ate 0.5-per­cent in­crease in May, ac­cord­ing to econ­o­mists polled by Bloomberg.

Bri­tain’s Prince Harry and US ac­tor Meghan Markle got mar­ried last month, with many Bri­tons hold­ing street par­ties to mark the oc­ca­sion.

Thurs­day’s data “was well ahead of econ­o­mists’ fore­casts, and ster­ling re­acted pos­i­tively, jump­ing al­most half a cent against the dol­lar”, said Ben Bret­tell, se­nior econ­o­mist at Har­g­reaves Lans­down.

“Some traders will be bet­ting that a stronger re­tail per­for­mance strength­ens the case for higher in­ter­est rates this sum­mer,” he added.

How­ever Bret­tell pointed also to the gloom sur­round­ing some ma­jor UK re­tail­ers.

Trou­bled UK bud­get chain Pound­world on Mon­day fell into ad­min­stra­tion, putting it closer to col­lapse with the loss of up to 5,100 jobs un­less a last-ditch buyer can be found.

Pound­world, which is bat­tling against dis­count­ing in su­per­mar­kets, ap­pointed fi­nan­cial group Deloitte to help it find a buyer and stave off store clo­sures and job losses.

The an­nounce­ment came just days af­ter House of Fraser, the Chi­nese-owned de­part­ment store chain, said it is clos­ing more than half its shops across Bri­tain and Ire­land, risk­ing the loss of 6,000 jobs.

Bri­tish re­tail­ers with large amounts of stores are suf­fer­ing also from fierce on­line com­pe­ti­tion from the likes of US gi­ant Ama­zon.

The UK is ex­pe­ri­enc­ing also weak house­hold spend­ing gen­er­ally amid Brexit un­cer­tainty.

Last month, Bri­tish food-to-cloth­ing re­tailer Marks and Spencer said it would shut more than 100 UK stores as it looks to shift at least one third of over­all sales on­line.

Em­pha­sis­ing the fast-grow­ing shift to on­line among Bri­tish con­sumers, Ama­zon last week said it plans 2,500 new UK jobs by the end of the year.

“While the squeeze on house­hold fi­nances looks to have ac­cel­er­ated the demise of re­tail­ers not abreast with cur­rent con­sumer shop­ping habits, it has pre­sented an op­por­tu­nity to gain mar­ket share for those nim­ble enough,” noted Chris­tian Jac­carini, an econ­o­mist at the Cen­tre for Eco­nom­ics and Busi­ness Re­search.

Sales ral­lied 1.3 per cent last month af­ter a jump of 1.6 per cent in April.

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