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(Alliance News) - UK retail sales declined in August from the month before, figures on Friday showed, with more consumers going out as lockdown measures have eased, hurting the grocery sector.
Retail sales declined 0.9% in August from July, confounding expectations of 0.5% growth, according to market consensus cited by FXStreet. It was a second straight month of lower sales. In July, they had declined 2.5% from June.
"Food store sales volumes fell by 1.2% in August 2021, with some evidence to suggest that the further easing of hospitality restrictions had an impact on sales; people increased their social spending such as eating and drinking at restaurants and bars," the Office for National Statistics said.
"Non-food stores reported a fall of 1.0% in sales volumes in August 2021, driven by falls in department stores (negative 3.7%) and other stores, such as sports equipment and computer stores (negative 1.2%)."
Annually, retail sales were flat, missing expectations of 2.7% growth. Retail sales had risen 2.4% annually in July. August's retail sales were, however, 4.6% above pre-virus levels.
The proportion of online sales improved to 28% in August, up from 27% in July and 20% before the onset of the pandemic.
Excluding fuel, UK retail sales declined 1.2% monthly and 0.9% yearly. Fuel sales rose 1.5% in August, though are still 1.2% below pre-virus levels.
"Our passion for the big shop dimmed slightly in August, as we rediscovered our passion for a big night out. We spent more in bars and restaurants, and bought 1.2% less in food stores than in July," commented Sarah Coles, personal finance analyst at Hargreaves Lansdown.
"However, there are signs that life hasn't entirely returned to normal, and we're still spending more time raiding the fridge and parking ourselves on the sofa, because we're still buying 3.4% more in supermarkets than before the pandemic."
Coles noted that supply shortages, leading to some empty store shelves, also may have played a role in discouraging shoppers in August.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.6% at 7,068.53
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Hang Seng: up 0.6% at 24,822.99
Nikkei 225: closed up 0.6% at 30,500.05
DJIA: closed down 63.07 points, or 0.2%, at 34,751.32
S&P 500: closed down 6.95 points, or 0.2%, at 4,473.75
Nasdaq Composite: closed up 20.40 points, or 0.1%, at 15,181.92
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EUR: up at USD1.1773 (USD1.1762)
GBP: up at USD1.3795 (USD1.3765)
USD: up at JPY109.87 (JPY109.65)
GOLD: up at USD1,763.80 per ounce (USD1,756.55)
OIL (Brent): firm at USD75.38 a barrel (USD75.00)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
1000 CEST EU euro area balance of payments
1100 CEST EU consumer price index
1100 CEST EU construction output
1100 CEST Italy balance of payments
0700 BST UK retail sales
0930 BST UK Bank of England/Kantar quarterly inflation attitudes survey
1000 EDT US University of Michigan survey of consumers
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Travelling is set to be made cheaper and more straightforward for doubled-jabbed holidaymakers under a shake-up of coronavirus rules in the UK. The green and amber lists are expected to be merged to form one category of low-risk countries while the number of destinations on the red list will be reduced. There is also speculation that fully vaccinated arrivals will no longer need to take a pre-departure lateral flow test or a post-arrival PCR test. This would save travellers around GBP100 per trip. But while rules may be eased for fully vaccinated travellers, those who have not been jabbed could face tougher restrictions. Currently, travellers who have not had both doses of a coronavirus vaccine must take one PCR test and are not required to self-isolate after arriving from a green list destination. According to reports, they could be required to quarantine at home and be required to take two tests when arriving from a low-risk location under the new system.
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BROKER RATING CHANGES
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UBS CUTS ANGLO AMERICAN TO 'SELL' (NEUTRAL) - PRICE TARGET 2,600 (2,800) PENCE
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MORGAN STANLEY CUTS ANGLO AMERICAN TO 'EQUAL-WEIGHT' (OVERWEIGHT) - PRICE TARGET 3,320 (3,670) PENCE
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MORGAN STANLEY RAISES EVRAZ TO 'OVERWEIGHT' ('EQUAL-WEIGHT') - TARGET 680 (650) PENCE
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RBC RAISES HSBC TO 'OUTPERFORM' (SECTOR PERFORM) - PRICE TARGET 460 (450) PENCE
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BARCLAYS RAISES HSBC TO 'OVERWEIGHT' (UNDERWEIGHT) - PRICE TARGET 530 (480) PENCE
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BARCLAYS RAISES STANDARD CHARTERED TO 'EQUAL WEIGHT' (UNDERWEIGHT) - PRICE TARGET 550 (490) PENCE
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COMPANIES - FTSE 250
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Virgin Wines said it has entered into a "first of its kind" partnership with Moonpig. Virgin Wines will launch a range of products on Moonpig's online gifting platform. "As part of the new and innovative partnership, Virgin Wines will launch a range of 32 different wines, some of which are available exclusively via the Moonpig website, as part of the latter's ever expanding gifting proposition. The first of its kind 'shop in a shop' launch allows customers to buy a bottle or wine gift either as a standalone purchase or as an add-on to any card purchase," the company said. AIM-listed Virgin Wines said the partnership is effective immediately.
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COMPANIES - MAIN MARKET AND AIM
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Martin Sorrell's advertising firm S4 Capital announced the acquisition of Zemoga, which S4 will merge with its Media.Monks brand. Zemoga provides product design, engineering and delivery services to enterprise clients including Bridgestone, Morningstar, Sony and Roku. It has offices in Los Angeles, New York and Wilton, Connecticut and delivery centres in several cities in Colombia. The deal marks a foray into the technology services sector for S4, which it said will become its third practice area. "Entry into the technology services sector through Zemoga gives us the full capability to talk to the chief technology or information officer, as well as the chief marketing and chief sales officer. We now have the full set," Sorrell said.
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Estate agent chain Foxtons has named Nigel Rich as its new chair, with effect October 1. He replaces Ian Barlow from October 1. Barlow's departure was announced in July, after a major shareholder called for "radical" changes to the board following years of share price declines. Foxtons has faced investor dissatisfaction after years of share price declines since a peak of almost 400p in 2014. The Times reported in June that Hosking Partners called for "radical board-level changes" and wrote to Barlow. Barlow has been a board member since the estate agent's IPO in September 2013. He took the role of chair in March 2020. Newly-appointed Rich has served as chair of estate agency Hamptons International and of FTSE 100-listed Segro. He has also served as a non-executive of ITV.
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Fellow AIM listing Safestay has put itself up for sale as part of a strategic review. It has a market capitalisation of GBP12.5 million. The London-based hostels operator noted it has already received a "very early stage and highly conditional approach" from a potential buyer. "Individual and group bookings are coming in for the winter and for 2022 and underpin our confidence of returning to pre-Covid levels of trading. We believe strongly in the appeal of the Safestay brand. However, we recognise that this is a natural point, as we relaunch the business post covid, to undertake a strategic review, in order to maximise value for all shareholders. This process will reveal whether there is additional value for shareholders compared to the upside we believe we can deliver," Chair Larry Lipman said. Safestay has appointed PricewaterhouseCoopers as financial adviser for strategic review and formal sale process.
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Aquis-listed Love Hemp will list its products on Amazon, after being selected by the US e-commerce firm. The CBD and hemp products firm said this follows a "rigorous compliance process". A selection of its stock will be available initially, and Love Hemp expects the range to increase as an authorisation process continues. Love Hemp said: "As an Amazon Vendor, Love Hemp will also have its own dedicated virtual store through which Amazon and the company will conduct marketing activities to drive awareness and visibility of Love Hemp products. Operating on the Amazon Vendor platform, Amazon will place orders with Love Hemp in order to fulfil consumer orders from Amazon's central depot. These orders will be shipped across the UK and into Europe."
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COMPANIES - GLOBAL
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Federal prosecutors are preparing to indict a former Boeing test pilot suspected of misleading aviation regulators over the safety issues blamed for two fatal 737 MAX crashes, the Wall Street Journal reported. Mark Forkner was the lead contact between the aviation giant and the US' Federal Aviation Administration over how pilots should be trained to fly the planes, the Journal said. According to documents published in early 2020, Forkner withheld details about the planes' faulty flight handling system known as the Maneuvering Characteristics Augmentation System, or MCAS – later blamed for both crashes – from regulators. The 737 MAX was formally certified in March 2017, but was grounded worldwide for 20 months following two crashes in October 2018 and March 2019 that killed 346 people.
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Friday's Shareholder Meetings
Accsys Technologies PLC - AGM
Auto Trader Group PLC - AGM
Ferrexpo PLC - GM re election of Vitalii Lisovenko to board
Greencoat Renewables PLC - EGM re adding Spain and Portugal to investment policy
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By Tom Waite; thomaslwaite@alliancenews.com
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