UK RETAIL SALES JUMP IN MAY
Consumers basked in warm weather and enjoyed royal wedding
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.