A quick trading preview of the January 2018 UK retails sales report 16 February 2018

Just a quickie before the UK retail numbers at 9.30 GMT. Last month sales dropped 1.5% m/m. That was worse than the -0.6% expected, and well done on Nov’s 1.1%. Year on year sales came in at 1.4% vs 3.0% exp, with Nov at 1.5%.

Here’s what’s expected today;

  • Retail sales 0.5% exp m/m
  • Ex-fuel 0.6% vs -1.6% prior
  • 2.6% exp y/y
  • Ex-fuel 2.5% exp vs 1.3% prior

The data from the othe rminor UK reports paint a mixed picture;

  • VISA retail report showed y/y sales falling 1.2% in Jan vs -1.0% in Dec. Store sales fell 4.0% y/y but online sales rose 1.5%. VISA spending accounts for around a third of all UK spending.
  • The BRC retailers report had total retail sales up 1.4% vs 1.4% in Dec. Like-for-like sales were also up 0.6% vs 0.6% prior y/y. Food was the driving force as non-food spending fell 1.2% 3m-Dec, and posted their first annual decline in 9 years.
  • The supermarket spending jump was also confirmed by Barclays who said it was the strongest increase in 7 months. Overall spending was up 3.9% y/y vs 4.0% in Dec.
  • The CBI report showed continued growth but it slowed in Jan. Total sales came in at 14 vs 20 prior

With retails being a volatile report, it’s hard to gauge what could happen today based on the info above. If food spending continued, that could bring us better numbers if non-food picks up too. If not, I’d shy on the side of seeing worse numbers.

For the pound, A good number will likely challange the highs, while a poor number might be something for the dip buyers to hit. I’ll be looking at the 1.41000-1.4080 area for signs of that.

Ryan Littlestone

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