Retail sales edge up after World Cup boost
RETAIL sales volumes received a World Cup boost in June after strong sales of electrical goods drove a faster-than-expected 0.7 per cent monthly rise, official data showed.
The Office for National Statistics said sales volumes rose 1.3 per cent on the year, also faster than the one per cent gain expected after an upward revision to May’s monthly reading to 0.8 per cent from 0.6 per cent.
The figures suggest consumer spending could give a decent boost to GDP growth in the second quarter.
Household goods stores led the rise, with sales jumping by 1.6 per cent on the month and 6.1 per cent on the year – their biggest annual increase since May 2008 – as football fans splashed out on the latest technology for the World Cup tournament in South Africa.
Discounting by retailers also lured in shoppers, with many outlets bringing forward seasonal sales.
The retail sales deflator, a measure of price inflation, eased to 1.3 per cent on the year, barely half May’s level and the lowest since November.
Excluding auto fuel, retail sales were up even more strongly, rising by one per cent on the month and 3.1 per cent on the year. Fuel sales are down 15.9 percent in volume terms compared with the same month last year.
Howard Archer of Global Insight said: “Despite pretty buoyant retail sales growth in June, it is hard to be optimistic about the prospects for consumer spending.
“Indeed, we believe that consumer spending will be limited over the second half of 2010 and beyond, which would not be good news for overall growth prospects given that consumer spending accounts for some 65 per cent of GDP.”