Friday, October 29, 2010

Economics 29/10/10: Retail sales

After two weeks of absolutely excessive work loads, including a week of marathon teaching (gotta love that feeling of total exhaustion after 5 days worth of 6 hours straight lecturing on top of regular work), the blog is back.

The first order of the day - catching up with today's data. Retail sales... well, they are still tanking. Predictably, given weakening sterling (incentive to shop North), beginning of the festive season shopping (another incentive to head North for larger ticket items savings) and continued decline of overall economy.

Per CSO today, let's deal with the volumes and values of total sales first
  • Retail Sales volume decrease by 0.3% in September 2010 compared with September 2009
  • The volume of retail sales (i.e. excluding price effects) decreased by 0.3% yoy and declined 0.9% mom.
  • The value of retail sales decreased by 2.6% yoy and there was a mom change of -1.2%.
Few charts now:
Looks like bottom fishing just got slightly more fun on both value and volume. And it's too bad you can't short retail sales:
Relative to peak, total sales are......errr... sickening?

As I highlighted on many occasions before, our Government's desire to subsidize Japanese, Korean, French, German etc manufacturers of motor vehicles, coupled with the vanity plates year have meant that our total retails sales are rather overly optimistic when it comes to determining the real retail environment out there. So let's drop Motor Trades out of the data:

If Motor Trades are excluded, there was
  • an annual decrease of 4.1% in the value of retail sales and a monthly decrease of 0.9%
  • volume of retail sales decreased by 2.5% in September 2010 yoy and fell 0.8% mom.
  • thus, increases yoy in volumes were posted in: Motors (+13.2%), Non-Specialised Stores (+0.8%)
  • of course, decreases were led by Other Retail (-12.4%) and Bars (-11.6%).
  • mom declines in the volume "were evident in ten of the categories while only three categories showed monthly increases in September 2010". So broadly, monthly adjusted series were heading down.
Yeah, that does look like an AIB share price chart... and then the rates of change:
Painful? Yes. Brian & Brian will not be happy campers - VAT receipts must be depressed. Jobs are also clearly going to be under pressure as we exit festive season, implying that absent a dramatic reversal of the recent trends, retail sector will be in severe pain comes January.

Not that it was avoiding that pain in recent past:

We now have provisional estimates for Q3 2010, so let's update quarterly graphs - which confirm broadly the weakening trend:
  • volume of retail sales increased by 0.2% in the third quarter of 2010 compared with the same quarter in 2009, and
  • there was no change in the volume of retail sales when comparing the third quarter of 2010 with the second quarter.
  • If Motor Trades are excluded the volume of retail sales decreased by 2.3% year-on-year, while the quarterly decrease was -2.0%.

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