–June Retail Sales inc. fuel +0.7% m/m; +1.3% y/y
–June retail sales ex fuel +1.0% m/m; +3.1% y/y

LONDON (MNI) – Retail sales volumes rose sharply in June, helped by
extra sales of electrical items in the run up to the World Cup, and
second quarter growth hit its highest level in two years, according to
figures released by National Statistics Thursday.

On a trend basis total retail sales hit their highest growth rate
since April 2008, with growth in the second quarter rising to 2.2% from
the first quarter. Excluding auto-fuel the quarterly growth rate rose
to 1.3%, the highest since October 2009.

While these figures may well help to assuage fears that consumers
are reining in spending as the economy recovery appears to be faltering,
retail sales accounts for only around one-third of total consumer
spending and 5% of overall GDP.

The Bank of England’s Agents Summary of Business Conditions,
released yesterday, noted that consumer spending growth had slowed
through the second quarter of this year. Chief Economist of the Bank of
England Spencer Dale said in an interview in The Independent today that
the near-term outlook for growth had deteriorated.

The June figures showed retail sales volumes rose 0.7% on the month
and by 1.3% on the year, above the median for an increase of 0.4% on the
month and 0.9% on the year. There was also an upward revision to the May
figures which now show volumes rose 0.8% on the month from an initially
estimated 0.6% increase.

Excluding auto-fuel, retail volumes increased by 1% on the month
and were up 3.1% on levels a year earlier, also above the median for a
0.4% monthly increase and 2.2% on the year.

National Statistics said that the World Cup which started in June,
had helped boosted sale at electrical and department stores, with
customers purchasing items such as new televisions. There was, however,
strong growth across all categories.

Predominantly food store sales increased 0.6% on the month while
non-food volumes rose 1.2%.

Within the non-food sector, the strongest growth was in household
goods stores where volumes were up 1.6% on the month. Department store
sales rose 1.5% on the month, textile, clothing and footwear rose 1%,
while sales at other stores were up 1%.

Non-store retailing and repair store sales increased by 1%.

The retail sales deflator, a guide to price inflation on the High
Street, eased to 1.3% in from 2.4% in May. Excluding auto fuel the
deflator declined to 0.3% from 0.6%, the lowest since February.

–London bureau: 00 44 207 862 7492; email: drobinson@marketnews.com

[TOPICS: MT$$$$,M$B$$$,MABDS$]