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Timm

Retail Sales Shock

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The vital signs for UK Plc are still extremely strong:

1. Highest bond ratings in the world

2. Powerful stock market that rises on bad news and goods news

3. Currency that does 2. above

4. Last man standing in the West regarding house prices still at more than 5X income

5. Low repossession rates compared with our sister bubble in the US

6. Very little unemployment compared with the US and EZ

7. Extremely high rental rates

Soaring vs. Euro, $ and a wide basket:

CURRENCIES

Currency Pair Price Change

GBP to USD 1.6207 +0.0038

GBP to EUR 1.1934 +0.0045

GBP to JPY 135.2514 +0.4704

GBP to TRY 2.5622 +0.0128

GBP to THB 49.6349 +0.1038

More currencies rates »

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An "unexpectedly" bullish 1.9%.

http://www.forexfact...om/calendar.php

Expected was +0.6%, and plenty of the pundits were expecting a fall.

Best get those interest rates up sharpish to keep a lid on all this domestically generated demand!

Anyone know whats happened to trends in lending? Due out at 9:30 but changed to tentative.

Edit: its there now. Up to 41k from 40k

Edited by Pent Up

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http://uk.finance.yahoo.com/news/Retail-sales-Jan-rebound-reuters_molt-634306081.html;_ylt=Agk69.MiqA6d1iHBmVO7W1vSr7FG;_ylu=X3oDMTE5Zjh1OGIzBHBvcwMxMARzZWMDeWZpVG9wU3RvcmllcwRzbGsDcmV0YWlsc2FsZXNp?x=0

However, there was some anecdotal evidence that shoppers made major purchases before the VAT rise took effect on January 4, and that sales fell off thereafter -- a pattern also noted by the British Retail Consortium.
KEY POINTS
- Fastest m/m retail sales volume growth since Feb 2010
- Fastest y/y retail sales volume growth since Nov 2004
- Fast 3m/3m-yr ago retail sales volume growth since Dec 2009
- Fastest m/m automotive fuel sales volume growth since Jan 2006
- Fastest y/y sales growth for predominantly non-food stores since May 2004
- Fastest y/y sales growth for non-store retailing since records began
- Fastest y/y sales growth for automotive fuel since Dec 2007

Looks like a frenzied orgy of spending as cash rich shoppers splashed money in every direction. We ahev never had it so good. :D

Edited by Realistbear

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http://uk.finance.yahoo.com/news/Retail-sales-Jan-rebound-reuters_molt-634306081.html;_ylt=Agk69.MiqA6d1iHBmVO7W1vSr7FG;_ylu=X3oDMTE5Zjh1OGIzBHBvcwMxMARzZWMDeWZpVG9wU3RvcmllcwRzbGsDcmV0YWlsc2FsZXNp?x=0

However, there was some anecdotal evidence that shoppers made major purchases before the VAT rise took effect on January 4, and that sales fell off thereafter -- a pattern also noted by the British Retail Consortium.

KEY POINTS

- Fastest m/m retail sales volume growth since Feb 2010

- Fastest y/y retail sales volume growth since Nov 2004

- Fast 3m/3m-yr ago retail sales volume growth since Dec 2009

- Fastest m/m automotive fuel sales volume growth since Jan 2006

- Fastest y/y sales growth for predominantly non-food stores since May 2004

- Fastest y/y sales growth for non-store retailing since records began

- Fastest y/y sales growth for automotive fuel since Dec 2007

London is the shopping capital of the World

The amount of times I hear expats of various nations out here (mainly women) talking about their long weekend of retail therapy in London is unbelievable.

London is also fav destination of all the wealthy Arabs. Often I have flown on a plane packed with Saudi birds off for a weeks shopping in London. Looking at what they are dressed in the desinations are certainly not Primark. ;)

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http://www.bloomberg.com/news/2011-02-18/u-k-january-retail-sales-jump-on-rebound-from-coldest-december-in-century.html

U.K. retail sales rose almost
four times as much as economists forecast
in January as consumer spending rebounded after the coldest December in a century.

The most unexpected amount since expectations began?

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*bangs head*

Why would anyone be surprised?

Unacceptable levels of debt were caused by unacceptable levels of spending money on tat.

Back to 'Open all hours' style living I think.

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An "unexpectedly" bullish 1.9%.

http://www.forexfact...om/calendar.php

Market expectation (according to Forex) was +0.6%, and plenty of the media pundits were expecting a fall.

As VAT as a portion of the total goods price went up by 2.12% and there have been lots of other price increases (esp as January is when more are reviewed than any other time, particularly if the desire if for annual list price increase) surely 1.9% should be a disappointing figure and the future figures from now on should get worse as increasing prices start to kick demand (off course we could just see more price rises!).

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What's not been mentioned is the amendment to December - revised from -0.3% to -1.0%

Well spotted!

(...)

The most unexpected amount since expectations began?

No, the Spanish Inquisition is 100% unexpected. Therefore, when they do turn up, the surprise is infinate.

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- Fastest m/m retail sales volume growth since Feb 2010
i.e. December was really bad and vat increase
- Fastest y/y retail sales volume growth since Nov 2004
i.e. rampant price inflation, vat increase with 2009 being a bad year
- Fast 3m/3m-yr ago retail sales volume growth since Dec 2009
i.e. fastest sales growth since the last vat increase
- Fastest m/m automotive fuel sales volume growth since Jan 2006
i.e. rampant fuel price inflation, vat and duty increase
- Fastest y/y sales growth for predominantly non-food stores since May 2004
i.e. rampant price inflation, vat increase
- Fastest y/y sales growth for non-store retailing since records began
i.e. more internet shopping tesco direct, ocado etc doing well
- Fastest y/y sales growth for automotive fuel since Dec 2007
i.e. rampant fuel price inflation, vat and duty increase
Retail is doing fine nothing to worry about, please move along. Give it a couple of months (May?) all will look different.

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Forgot to add pack size reductions etc. (i.e. stealth inflation) followed a couple of month later by pack price increases.

When I was working as consultant for some of the major food manufacturers, sales used to be measured in 3 ways:

value (aka volume to the BRC),

volume (# items of a particular type)

weight (to take account of pack resizing so we could assess how much more margin the competitors had taken when they reduced pack size!) need less to say weight always increased slower than the others!

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- Fastest m/m retail sales volume growth since Feb 2010
i.e. December was really bad and vat increase
- Fastest y/y retail sales volume growth since Nov 2004
i.e. rampant price inflation, vat increase with 2009 being a bad year
- Fast 3m/3m-yr ago retail sales volume growth since Dec 2009
i.e. fastest sales growth since the last vat increase
- Fastest m/m automotive fuel sales volume growth since Jan 2006
i.e. rampant fuel price inflation, vat and duty increase
- Fastest y/y sales growth for predominantly non-food stores since May 2004
i.e. rampant price inflation, vat increase
- Fastest y/y sales growth for non-store retailing since records began
i.e. more internet shopping tesco direct, ocado etc doing well
- Fastest y/y sales growth for automotive fuel since Dec 2007
i.e. rampant fuel price inflation, vat and duty increase
Retail is doing fine nothing to worry about, please move along. Give it a couple of months (May?) all will look different.

All the above are fantastic reason as to why Greorgie boy was right to put up vat to help tackle the deficit as opposed to income tax because the feckless shoppers in our society are paying all the extra tax.

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All the above are fantastic reason as to why Greorgie boy was right to put up vat to help tackle the deficit as opposed to income tax because the feckless shoppers in our society are paying all the extra tax.

+1

See my previous post

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The vital signs for UK Plc are still extremely strong:

1. Highest bond ratings in the world

2. Powerful stock market that rises on bad news and goods news

3. Currency that does 2. above

4. Last man standing in the West regarding house prices still at more than 5X income

5. Low repossession rates compared with our sister bubble in the US

6. Very little unemployment compared with the US and EZ

7. Extremely high rental rates

Soaring vs. Euro, $ and a wide basket:

CURRENCIES

Currency Pair Price Change

GBP to USD 1.6207 +0.0038

GBP to EUR 1.1934 +0.0045

GBP to JPY 135.2514 +0.4704

GBP to TRY 2.5622 +0.0128

GBP to THB 49.6349 +0.1038

More currencies rates »

It doesn't make any sense - We've got the financials of rogue state - i.e. they look like they are made up

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I always wonder if these 'growth' figures are inflation adjusted? For instance, if average inflation over 12 month in a shop is 5% (prices on average 5% higher than a year earlier) then surely growth would have to be 5% yoy just to keep up with inflation (ie; to sell the same amount of stuff). Presumably, some shops / companies rely on inflation increasing their turnover in order to show growth?

- Fastest m/m retail sales volume growth since Feb 2010
i.e. December was really bad and vat increase
- Fastest y/y retail sales volume growth since Nov 2004
i.e. rampant price inflation, vat increase with 2009 being a bad year
- Fast 3m/3m-yr ago retail sales volume growth since Dec 2009
i.e. fastest sales growth since the last vat increase
- Fastest m/m automotive fuel sales volume growth since Jan 2006
i.e. rampant fuel price inflation, vat and duty increase
- Fastest y/y sales growth for predominantly non-food stores since May 2004
i.e. rampant price inflation, vat increase
- Fastest y/y sales growth for non-store retailing since records began
i.e. more internet shopping tesco direct, ocado etc doing well
- Fastest y/y sales growth for automotive fuel since Dec 2007
i.e. rampant fuel price inflation, vat and duty increase
Retail is doing fine nothing to worry about, please move along. Give it a couple of months (May?) all will look different.

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I always wonder if these 'growth' figures are inflation adjusted? For instance, if average inflation over 12 month in a shop is 5% (prices on average 5% higher than a year earlier) then surely growth would have to be 5% yoy just to keep up with inflation (ie; to sell the same amount of stuff). Presumably, some shops / companies rely on inflation increasing their turnover in order to show growth?

Certainly the British Retail Consortium figures are not adjusted for inflation (I asked),

Peter.

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Reaction to the unexpected data is much as expected:

http://uk.finance.yahoo.com/news/UK-retail-sales-rebound-tele-798635527.html?x=0

VICKY REDWOOD, ECONOMIST, CAPITAL ECONOMICS

"We wouldn't take January's rise in sales as evidence that the consumer recovery is firmly back on track. Indeed, with real household incomes set to fall significantly this year, we find it hard to see consumer spending doing at all well."

MARC OSTWALD, MONUMENT SECURITIES

"As Mr (Bank of England Governor Mervyn) King has himself observed on many occasions it's almost impossible to make a judgement on acutal winter retail sales trends until you get to Easter. I think the market's rightly ignored this, largely. It's absolutely definitely not a trend. We won't get a proper idea of trend until we get to March."

ROSS WALKER, RBS (LSE: RBS.L - news)

"These numbers are volatile at the best of times, we've obviously got big downward revisions to December, a much stronger January outturn. Overall the underlying position looks a little bit firmer than expected."

HETAL MEHTA, ECONOMIST, DAIWA

"While we expected there to be some clawback from December's dismal, snow-hit retail sales, today's jump is a welcome surprise. But is still far too early to conclude that consumers are weathering the storm ... and with the past week's unemployment figures highlighting the fragility of the labour market, the housing market continuing to weaken and real earnings being hit hard by high inflation, it seems inconceivable that consumer spending will act as the driving force of the economy over the near term."

PHILIP SHAW, INVESTEC (Frankfurt: A0J32R - news)

"Trying to discern underlying trends from retail sales data at this time of year is difficult normally given seasonal problems. But given the added problems of the snow in December and the VAT hike in January, things are more complicated, but certainly on face of it, the figures are much more robust than expected."

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I may be preaching to the converted here but the fact that Retail Sales rose by 1.9% from December 10 to January 11 is greeted with the usual fanfare of "isn't this good" / "resilient consumers" etc etc is not really a good thing. Obviously a rise was expected (snow effect in Dec-10 ;) ) but every time I see "Retail Sales Rise" as a headline (and celebrated) I cannot help but think that we are not changing our ways (by "we" I mean UK population as a whole) from rampant consumer to net producer.

What would I like to see? Headlines about how our exports are going up, our imports are going down and how our trade balance is becoming more in kilter and eventually running at a surplus to pay back the national debt. Headlines about how we are becoming self reliant for food and energy and less affected on global food and energy prices - we have enough "green space", let's farm it for crops and make use of the natural energy we have (wind/wave/river) and harness that rather than burning fossil fuels.

Am I being naive and/or idealistic (or possibly even both)?

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I can tell you that February is proving extremely difficult.My sales are currently half of last months with just ten days left.Of course being 10% shorter doesn't help.

Edited by profitofdoom

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Here's an analysis of the US version:

During the past 21 years, the U.S. population has grown by over 22% while the dollar has lost about 37% of its purchasing power to inflation. When we adjust accordingly, the rebound in retail sales from the bottom in April 2009 merely gets us back to the per capita spending during the late summer of 1999.

Retail sales have been recovering since the trough in 2009. But the "real" consumer economy, adjusted for population growth still in a state of depression — 8.3% below its all-time high in January 2006.

Partying Like It's 1999

Peter.

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Won't they be able to claim the/some tax back? Would help us more if they couldn't.

Yes, but the clever customs people make sure there are long queues at the airport so the rich people do not bother and make there way straight to the first class lounge to quaff champers and quails eggs.

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I may be preaching to the converted here but the fact that Retail Sales rose by 1.9% from December 10 to January 11 is greeted with the usual fanfare of "isn't this good" / "resilient consumers" etc etc is not really a good thing. Obviously a rise was expected (snow effect in Dec-10 ;) ) but every time I see "Retail Sales Rise" as a headline (and celebrated) I cannot help but think that we are not changing our ways (by "we" I mean UK population as a whole) from rampant consumer to net producer.

What would I like to see? Headlines about how our exports are going up, our imports are going down and how our trade balance is becoming more in kilter and eventually running at a surplus to pay back the national debt. Headlines about how we are becoming self reliant for food and energy and less affected on global food and energy prices - we have enough "green space", let's farm it for crops and make use of the natural energy we have (wind/wave/river) and harness that rather than burning fossil fuels.

Am I being naive and/or idealistic (or possibly even both)?

The IR hike talk among the Muppets will send Sterling soaring which will cripple any hope of an export led revival.

Our headlines are geared toward one kind of good news: HPI.

The rest is doom and gloom, or inconsequential.

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Certainly the British Retail Consortium figures are not adjusted for inflation (I asked),

Peter.

Thanks. So that means that sales rises YoY simply illustrate inflation at work? That's really 'good'.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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