The UK retail sector has been on something of a roll for well over a year now, a backcloth of steadily improving economic conditions helping to boost the spending power of the average British shopper.
And this positive momentum was underlined earlier today when research tank Nielsen advised that 45% of respondents to its latest consumer confidence survey felt that now was a good time to make purchases. This is the highest reading since the question was first asked back in 2006.
“Consumer confidence in the UK continues to rise,” Nielsen UK managing director Steve Smith commented. “The UK is one of the fastest growing major economies, unemployment is falling and people are benefiting from zero inflation and lower prices in supermarkets and petrol stations,” he added.
Sector stalwarts back in fashion
The latest slew of data comes hot on the heels of Confederation of British Industry (CBI) numbers yesterday, which showed the sales balance for May smash analysts expectations with a positive balance of 51%.
Buying activity on the High Street is “bounding ahead,” according to the CBI, who also noted that “low inflation, which we expect to remain below 1% for the rest of the year, has given household incomes a much-needed boost and greater spending power.” Consequently 58% of respondents to this month’s survey expects sales to tick higher again next month, the highest figure since the late 1980s.
Many of Britain’s major retailers have already noted a massive uptick in shopper activity. Clothing house NEXT (LSE: NXT) saw full-price sales during January-March register at 3.2%, beating expectations for a rise of between 0% and 3%. And Marks and Spencer (LSE: MKS) saw like-for-like clothing sales tick 0.7% higher in the period, the first rise for 14 quarters and which was helped by resplendent activity at its M&S.com online hub.
Japanese-inspired designer Supergroup (LSE SGP) is also benefitting from the UK’s increasingly-hulking wallets, the business enjoying a 11.6% improvement in underlying sales during January-April, speeding up from an already-impressive 11.3% in the prior three months.
Tech titan set for terrific sales growth
But it is not just the UK’s fashion outlets that are set to enjoy the fruits of an improving retail segment. White goods and telephone emporium Dixons Carphone’s (LSE: DC) wide range of consumers goods, from the latest laptops and washing machines through to mp3 players and even telescopes, should continue to witness terrific sales growth as consumers increasingly splash the cash.
Indeed, the business said in its latest trading statement back in January that British like-for-like sales leapt 8% during the Christmas period. And with economic conditions having improved even further since then, I expect Dixons Carphone’s upcoming quarterly update slated for next week to blow the doors off.