Reality Retail Sales Figures
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Reality Retail Sales Figures

Reality Retail Sales Figures


Trading Features / Strategies from Simon Denham of Capital Spreads.

Whilst everyone hunts around for the reasons for the huge spike in retail sales last month I had known the forecast weeks in advance. My wife through diligent spadework had finally managed to persuade me to have a joint credit card (mine rather than hers). The resultant spending boom would have kept bigger countries than the UK out of recession.

Retailers, like farmers, are always pessimistic and will describe any situation as a ‘tough trading environment’ but the idea that spending was up a rather ludicrous 8% had many coughing into their tea.

I did wonder if fuel purchasing came under retail sales as the rise in price of petrol would probably make up for the entire amount but I am assured that this is not the case. The only real answer that makes sense is that inflation is rather higher than is being stated and the difference between price hikes on the high street for the basket that makes up the retail sales numbers was rather greater than the 3.3% reflected in the CPI.

The money supply numbers are dropping which would tend to give a contrary indication of events on the High Streets of Britain. However this is overwhelmingly influenced by much bigger factors (mortgages, bank lending etc) which have rather run into a brick wall recently so it is difficult to extrapolate the data from here either.


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There have been whispers of lack of expertise due to the inability of the ONS to pick up quality staff since they relocated to the wilds of Wales. No offence intended but the idea that the top end staff (the ones you really want to retain) will be happy to damage their long term employment prospects by re-locating 150 miles away from where most of the best jobs, in their field, are located is a classic recipe for disaster drawn up in a government department with no commercial expertise. The problem with this type of project is that the planners only really take into account their employees and not the families. Most professional couples are now two earner units. I can just imagine the many conversations between partners starting along the lines of “we will have to move to Wales because my job had been relocated there”, the other half would just say “in your dreams, I have no intention of changing jobs, the children are happy at school, I like the house, my friends are here etc etc”.

Relocation of call centres or back office staff to India or some such does not have these pitfalls as the quality of personnel that can be picked up is frequently higher than the pool that was laid off in the first place and the wages paid locally are tempting enough for entire family units to up sticks and move.

Aside from these speculations there is always the possibility, of course, that retail sales really were 8% higher than last year. But I would not stake much more than a bent thru’peny bit on it.



The above comments do not constitute investment advice and neither Capital Spreads nor Clean Financial accept any responsibility for any use that may be made of them.


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Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Article provided / approved by Capital Spreads which is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 182110.

'Reality Retail Sales Figures' edited by SD, updated 20-Jun-08



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