High-street sales lifted by sunshine, sport and summer sales, says CBI

Nearly 50% of UK firms enjoying sales volumes up on year ago, with Aldi and Lidl biggest supermarket winners, finds CBI survey

High-street sales soared due to the sunny weather, British sporting successes and the royal baby, and firms took on more workers at the fastest pace in more than a decade, the Confederation of British Industry claims.

The organisation's monthly distributive trade survey found that nearly half of all businesses said that sales volumes were up on a year ago, with just 22% saying they fell, giving a balance of +27%, the strongest in nine months.

More than one in four retailers added that they expected sales to grow at the same rate next month, suggesting a slow recovery on the high street.

Barry Williams, chairman of the CBI distributive trades survey panel, said: "The feel-good factor from the heatwave, summer sales, royal baby fever and sporting victories, has helped boost the high street. A rise in spending is welcome news, but the bottom line is that confidence will not bounce back fully until family finances improve further."

Lidl's revenues rose by 14.9% from June to Augsut this year.

Growth came from all areas, including clothing, food and recreational goods, while employment in the retail sector is expected to increase, according to the CBI.

In its quarterly survey, the reported employment balance improved to its highest level since May 2002, while the business situation index rose to its highest in three years.

The supposed green shoots come as the UK's third biggest supermarket, Sainsbury's, defied the march of the discount retailersAldi and Lidl as the only one of the big four supermarkets not to lose market share in the last 12 weeks.

Tesco, Asda and Morrisons all lost out, although the UK's fourth biggest supermarket, Morrisons, did manage to stem the tide of recent falls in sales, according to Kantar Worldpanel.

John Coll, director at the retail specialists, said: "Sainsbury's has continued to grow ahead of the market over the past 12 weeks, achieving sales growth of 4.9%. It benefitted from its support of the paralympics last year and its growth has continued since then."

Sainsbury's market share grew to 16.5% from 16.4% last year, while Tesco fell to 30.2% from 30.7%, Asda fell to 17.1% from 17.5%, and Morrisons fell to 11.3% from 11.5%.

However all supermarkets did see an increase in takings, partly due to inflation, but also thanks to the prolonged warm summer.

Ice cream sales soared 21%, sun care products rose 37%, and hay fever remedies also grew 37% over the summer, compared with the same period last year.

The biggest winners, though, continued to be the discounters, as Aldi and Lidl both recorded their biggest market share since entering the UK market in 1989 and 1994 respectively.

Aldi increased its market share from 3% to 3.7% since last year, with takings in the 12 weeks to August 18 soaring 31.9% to nearly £1bn, compared with £660m in the same period in 2012.

Lidl also saw a boost to its market share from 2.8% to 3.1%, with its revenues also up 14.9% to £760m in the 12-week period.

These supermarkets still remain a long way behind the UK's leading store, Tesco, which took £7.4bn over the same period, or £88m a day.

Article Source : http://www.guardian.co.uk

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Markets hit by fears that Syria attack could raise fuel prices

FTSE down but Shell and BP shares boosted while petrol retailers warn of grim outlook for consumer

Mounting prospects of a US-led military strike on Syria sent shock waves through the energy and financial markets on Wednesday with oil hitting its highest level for six months and drawing predictions that it could reach $150 (£97) a barrel.

The move in the value of crude, reflecting fears that wider Middle East output could be disrupted, gave a major boost to the share price of Shell, BP and other oil companies but sent the stock of heavy fuel-users such as easyJet and International Airlines Group, the parent of British Airways, into a nosedive.

The Petrol Retailers Association also warned motorists that it was only a matter of time before the price of petrol at the pump would have to rise and the outlook was "grim".

Motorists are warned petrol prices will rise as oil hits its highest level for six months, with investors worried the Syrian conflict could affect neighbouring countries. 

The FTSE 100 index fell further in London as investors worried about the potential for a wider conflict involving Iran and even Russia wading in on the side of the embattled government of Assad.

There was a slight rally in prices as David Cameron indicated he would first seek some kind of United Nations approval for an attack on Syria but not before shares in Dubai – the most important financial market in the Middle East – had slumped 7% and the index in Kuwait had fallen by 6%.

Michael Wittner, head of global oil research at French bank Société Générale, said the North Sea crude oil benchmark, Brent Blend, could rise from Wednesday morning's six-month high of $117 a barrel to as much as $150 if the war spread from Syria to key important oil producers such as Iraq. The US crude price, for West Texas intermediate oil, hit a two-year high, rising above $112 for the first time since May 2011.

"We believe that in the coming days Brent could gain another $5-$10, surging to $120-$125, either in anticipation of the attack or in reaction to the headlines that an attack had started," Wittner said in an investment note to clients.

"If the regional spillover results in a significant supply disruption in Iraq or elsewhere, Brent could spike briefly to $150," he added.

Syria is not an important oil producer or transit country but the wider area including Saudi Arabia produces 35% of the world's supplies. If Iraq or Iran were affected by any fallout from a military strike on Syria, the global oil market would rely on extra output from Saudi Arabia, the only member of the Organisation of the Petroleum Exporting Countries with significant spare oil production capacity.

"The Saudis could handle most likely scenarios, but the markets will look at the shrinking spare capacity that remains after any disruption is made up, and that would be bullish [for higher oil prices]," said Wittner.

The oil price spike was a boost to Shell, whose share price rose almost 4% to £22.25, and BP, whose shares rose by more than 1% at 452p.

The wider FTSE 100 index of leading companies fell by nearly 0.5% early on , adding to an already 3% slump since the middle of the month on the back of fears about Syria, allied with concerns that the US would finally halt a long-running government economic stimulus package.

Stock markets in continental Europe were also down, as was the Nikkei index in Japan, which fell by more than 2% to 13,264 points, with companies such as Toyota and Sony down up to 3%. The Dubai Financial Market index closed at 2,549.61 points, with Emaar Properties leading the rout. Shares in the developer that built Dubai's Burj Khalifa, the largest freestanding structure in the world, fell almost 8.5%.

Most mining companies based in London, such as Glencore Xstrata, were hit by the political uncertainty, but the price of gold – seen as a haven – continued to rise as did the US currency. The dollar strengthened 0.5% against the Japanese yen and 0.3% versus the euro.

Ishaq Siddiqi, London-based market strategist at ETX Capital, explained the dangers to the wider economy of higher crude values on the back of foreign aircraft strikes on Syria. "Once filtered through to the real global economy, the increase in oil prices will put a halt to the pace of economic momentum we are currently experiencing in major parts of the world.

"It's plausible that Brent oil prices could be over $120 a barrel in the coming days and, if oil prices spike even higher, it wouldn't be out of the question for the US Federal Reserve to hold off on tapering stimulus measures this year."

Threats of a $150 oil price take the markets back to July 2008 when Brent briefly traded at US$147.50, the highest intraday price on record. This was the height of the economic boom, which was followed by the autumn collapse of Lehman Brothers and then a full-scale banking crisis.

Crude then crashed to $40 but has largely been priced at over $100 since the middle of 2010, despite a relatively slow recovery in the world economy. Prices have been pushed upwards due to a mixture of stronger demand and supply problems. Oil supply from Opec producer Libya has already been reduced to a trickle after an armed group shut down a pipeline linking its largest western oilfields to the ports.

Article Source : http://www.guardian.co.uk

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