Retail Sales figs due Wednesday - just found this interesting market analysis...

inspector_monkfish

15:21 17Jun09 (GBP) May retail sales to shock on the downside?

(GBP) UK May retail sales figures are due on Thurs (08:30GMT), and after two consecutive months of numbers that surprised the market on the upside, we could well see a May print that shocks on the downside. Should this be the case, expect Gilts and S-Stg to recoup some of their recent losses, whilst Cable could ease further, as players start to question the underlying resilience of the UK consumer.

We look for May volume retail sales to reveal a 1.2% m/m decline, after rising 0.9% m/m in Apr, and contrasts markedly with the 0.4% increase that is the market consensus expectation. Such an outturn would represent a partial correction of the 2.1% rise seen in Mar and Apr, at a time when unemployment is climbing sharply and average earnings growth is weak. It is evident that overseas tourists to the UK have been taking advantage of the weak GBP to buy comparatively cheaper UK goods, which has been helping to buoy the volume retail sales figures. But note that this is not actually reflected in the overall household quarterly real spending figures contained in the GDP statistics. These show that although volume retail sales rose 0.5% q/q in Q1, real overall household consumption plunged 1.2% over the same period. So, unless there is a sharp recovery in household expenditure on cars and services, Q2 could reveal a perceptively negative figure for personal spending growth.

That said, the rationale behind our sub-consensus prediction for May retail sales lies in the evidence from the CBI and BRC surveys that illustrated sharp declines in their respective retail sales numbers for May, following the Easter trading period. In addition we notice that not only would the May spikes in food and petrol prices have eroded purchasing power, and perhaps impacted discretionary spending in May, but the effects of a possible rise in the May retail sales deflator would probably have borne down on the retail sales volumes calculations.

Should our forecast materialise, apart from dragging the retail sales y/y
rate down into negative territory, of -1.8%, from +2.6% y/y in Apr, it would still allow the more crucial 3mth/3mth rate to rebound, to +0.2% from -0.2% in the 3mths to Apr, as the effects of Feb's sharp 2.1% m/m decline drop out of the calculations. Gilts may heave a temporary sigh of relief, whilst Cable eases further to around the 1.6100 level.

purch

Sounds like we could be having some Yellow shoots !!!!

chucky

saw this the other day - looks like if you do look into there are reasons for the drop...

London experienced the weakest sales growth in 2009 during May, according to figures from the British Retail Consortium (BRC).
The organisation's monthly monitor shows that like-for-like retail sales growth in central London fell from 8.5 per cent in May 2008 to 1.6 per cent this year.

However, he also notes that the capital's retailers outperformed the rest of the country, achieving like-for-like sales growth of 4.1 per cent for March to May, compared to the 0.7 per cent UK average.

Helen Dickinson, head of retail at professional services provider KPMG, which co-authored the report, notes that last May was one of the strongest months in 2008, which contributes to this year's figures looking 'disappointing'.

http://www.smallbusiness.co.uk/channels/sales-and-marketing/news/1052401/london-sales-growth-slips-over-may.thtml

geoffky

as ever mr monk..a very informative post that i really enjoy..

fc123

OK Some anecdotal from The Bottom of The Pond for your thread...

OH was delivering our goods today at a Corp. Chatting to van driver who works for mass market (that's cheap from China BTW) handbag importer.
Their company was bringing in 2 X 40' containers per day (but unsure if this is 5 or 7 days) until very recently...now down to 2 or 3 X 40' containers per week.

They supply large High St chainstores to sell under own label.

Purely due to less volume in sales...but prices are still depressed.

To be fair, I am in fashion so things like weather do play a big part....despitre the M+S 'weather is for wimps' remark...it is pivotal to fashion sales...or new trends that can drive sales.

Our sector is oversupplied in mainstream, mass produced product at the moment....and that means retailers have to fight it out on price, not design/customer desire. The race to the bottom.

Another 5 year cycle is coming to play at the moment.

inspector_monkfish

oops. obviously the title of this post should have read THURSDAY...... i'm losing track of the days!!

data due in 7mins