Michael Bogner Says, World Cup Fever Saves UK Retail Sales
A drop in food, petrol and household goods sales dragged sales down in May, offsetting strong growth in areas like clothing and footwear, says Michael Bogner, the global investment house in Austria.
Online, June 23, 2014 (Newswire.com) - UK retail sales fell for the first time since January last month despite World Cup fever which drove higher sales of football shirts.
Shoppers generally proved unwilling to spend last month with the volume of retail sales down 0.5% over the month in May, compared with a 1% increase in April as consumers stocked up on goods for Easter.
"A drop in food, petrol and household goods sales dragged the number down in May," said Donald Haye, a UK market analyst for Michael Bogner, an independent financial advisory house in Austria. "This offset strong growth in other areas including internet sales, clothing and footwear, and second hand goods including charity shops and antiques."
Sales at sports shops were up 3.9% over the month according to the Office for National Statistics, which said the sector has showed continued growth since the London Olympics in 2012.
"In May, however, the boost came from football fans preparing for the start of the World Cup. This happens every 4 years, presuming England qualify for the tournament," Haye quipped.
On a quarterly basis, retail sales rose by 1.3% in the three months to May, marking the longest period of growth in six and a half years. Sales were up 3.9% over the year.
Economists had predicted the monthly drop in sales in May after a strong performance in April and said the underlying picture for retail sales remained strong suggesting that consumer spending will continue to contribute to Britain's economic recovery.
Consumer confidence is rising amid a growing economy, rising house prices, falling unemployment, low inflation, and low interest rates.
However, wage growth remains weak, lagging inflation and keeping the pressure on households which have faced falls in real pay for the majority of the past six years.
Samuel Taylor, senior UK economist at Michael Bogner, said: "There is a danger that spending growth slows if real earnings do not pick up soon. But we remain optimistic that a further fall in inflation and a recovery in productivity in the second half of this year will lift real pay and hence provide more solid foundations for the recovery in consumer spending."
Prices of goods sold by retailers in May were 0.7% lower than a year earlier, driven mainly by fuel prices. It was the biggest annual drop since September 2009.UK retail sales fall despite World Cup boost to sports shops