Saturday, July 30, 2011

30/07/2011: Detailed analysis of Retail Sales figures for June 2011

The volume of retail sales rose +0.2% in June 2011 compared with June 2010 and +1.1% mom. The 3mo average for the volume index is now at 93.07, while the 6 mo average is 92.3. Both below the current monthly reading. June reading marks the second consecutive monthly increase in the index. 2010 average is 93.3, while 2011 average to-date is 92.3, behind that of 2010.

The value of retail sales rose +0.4% in June 2011 when compared with June 2010 and there was a month-on-month increase of +0.7%. The value index now stands at 89.4 (marking the second consecutive month of increases) against 3mo average of 88.7 and 6mo average of 88.3. Compared to 2010 average of 88.9, the 2011 average to-date is now at 88.3.

Thus, the volume of retail sales in June 2011 stood at 94.1 down 16.73% relative to the peak. Current monthly reading for the value index is 23.59% below the peak for the series.
Couple of charts for quarterly changes:

Of course, the problem with the above data is that it is distorted by the motor sales volumes and values, especially pronounced due to the expiry of the Government incentive scheme for new motors purchases in June 2011. Hence, ex-motors data paints a dramatically different picture of continued deterioration in retail sales.

Excluding Motor Trades, the volume of retail sales fell 4.2% in June 2011 when compared with June 2010, while there was a monthly decrease of 0.1%. Thus, June marked a 5th consecutive month of declines in the colume of retail sales ex-motors. The index is now at 98.2, below 3mo average of 98.5 and 6mo average of 99.45 and well below 2010 average of 102.2.

Ex-Motor Trades there was an annual decrease of 3.2% in the value of retail sales and a
monthly decrease of 0.5%. Index reading of 94.6 in June 2011 stands below 3mo average of 95.3 and 6mo average of 96.2 as well as 2010 annual average of 97.6. The index has now declined (mom) for 3 months in a row.

In year on year terms, volume index retail sales ex-motors are now down 14 moths in a row and in terms of value index for 36 months in a row. In 2010, index of volume of retail sales ex-motors posted an average monthly decline of 0.28%, while in 2011 to-date the same figure is 0.03, while the latest 3mo average is 0.67% decline. For value of sales ex-motors, the average monthly decline was 0.24% in 2010, against 0.08% average monthly decline in 2011 to-date and 0.8% decline in 3 months to-date. So clearly, last 3 months suggest increased rate of deterioration on both 2010 and H1 2011 averages.

Relative to peak, the volume of retail sales ex-motors has now fallen 13.33%, while the value of retail sales ex-motors is down 19.42%. Both series continue their downward trajectory.

So overall, in June 2011, Motor Trades were up +21.9% yoy in volume. Alongside motor sales, sales of Electrical Goods (+5.2%) and Furniture & Lighting (+2.6%) were the only three categories that showed year-on-year increases in the volume of retail sales this month. Fuel (-12.0%), Hardware Paints & Glass (-10.4%) and Other Retail Sales (-8.1%) were amongst the ten categories out of 14 total that showed year-on-year decreases in the volume of retail sales this month.

In terms of value of retail sales, Motor Trades posted an annual increase of 18.3% - the only category of sales that posted an annual increase in value. Hardware & Paints (-10.9% yoy), Other Retail Sales (-6.0%), Bars (-5.8%) were the categories with largest (above 5%) declines in the value. Overall, 13 categories out of total 14 have posted yoy declines in value of retail sales.

My previous analysis of the Consumer Confidence indicator from the ESRI and high level dynamics in retail sales (see link here) shows that these trends toward continued pressures in the retail sector are expected to continue over coming months.
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