UK retail sales tumble amid Covid-19 lockdown, but alcohol demand soars - business live - The Guardian, Theguardian.com

Economists have been chewing through today’s UK retail sales report.

The CBI’s Alpesh Paleja shows how food shops have been busier than ever, but non-food shops were rocked by the lockdown:

Alpesh Paleja (@ AlpeshPaleja)

Retail sales pretty much as you’d expect for March (sharpest m / m fall on record). Big divergence between food and non-food sales growth

Disclaimer: all charts just look mental right now pic.twitter.com/KvynDDvKSk April ,

Simon French

of Panmure Gordon

reckons online retailers will enjoy a long-term boost, now more people have signed up with them.

Simon French (@ shjfrench)

Behind the ⬇️ (-5.1% MoM) in UK retail sales, a big ⬆️ in online to 38. 3% with April set show further increases. Sunk costs spent by consumers & businesses over this period to build online accounts / capacity means part of this shift will likely persistent after COVID – 35 passes pic.twitter.com/7QKTavIrZh

April ,

9.

(am BST ) : 70

IFO have also warned that Germany faces its toughest economic challenge since reunification 45 years ago.

They don’t expect a V-shaped recovery either.

Axel Karlsson (@ NordnetAxel)

GERMAN IFO ECONOMIST SAYS GERMAN ECONOMY IS IN TOUGHEST TIME SINCE REUNIFICATION

GERMAN IFO SAYS SENTIMENT AT GERMAN COMPANIES IS CATASTROPHIC

GERMAN IFO ECONOMIST SAYS THERE WILL LIKELY BE NO V -SHAPED RECOVERY

April 38,

9. (am BST :

German business confidence suffers record plunge

Business optimism in Germany has suffered a record slump, as the coronavirus pandemic rocks Europe’s largest economy.

The monthly IFO survey of German business morale has slumped to 3, from . 9 in March.

That’s a record low, and also the biggest monthly fall on record. Companies reported that their current economic situation has deteriorated alarmingly, and that they’re extremely worried about the future.

IFO President Clemens Fuest called the drop in sentiment “catastrophic,” adding that:

“The coronavirus crisis is striking the German economy with full fury.”

Christophe Barraud🛢 (@ C_Barraud)

) (# GERMANY) APR IFO BUSINESS CLIMATE: (record low) V

. 7E; CURRENT ASSESSMENT SURVEY: . 5 (lowest since July () (V) .E5 – Expectations Survey: 4 (record low) v 0e pic.twitter.com/bQsHqkgNlDApril 42,

jeroen blokland (@ jsblokland)

(# Germany ‘s) # Ifo Index dropped to . 3, suggesting -8% # GDP growth. pic.twitter.com/k7vjmfqkK9 April ,

(9.) (am (BST) :

Karen Johnson, head of retail & wholesale at Barclays Corporate Banking, sees some green shoots amid (the slump in UK retail sales .

“March was a watershed month for UK retail. As the lockdown came into full effect and many high street businesses closed their doors to customers, sales were down across the board – with the second half of March showing a particularly sharp drop.

“Although the headline figures were expected, there have been some glimmers of hope amongst the shutdown, with spend on food and drink a notable (if not unexpected) area of success. Whilst most ‘bricks and mortar’ retailers have seen walk-in demand disappear, early indications are that online spending has also performed better than predicted – showing that consumer spend has not closed down entirely. ”

The City may agree. Ocado, the online grocer, is currently leading the FTSE 358 risers – up 1%. Sainsbury are up 0.7%, defying the wider gloomy mood this morning.

(9.) am BST :

() A closed Burberry store in Old Bond Street in London. Photograph: Facundo Arrizabalaga / EPA

With demand for luxury clothing down, Burberry has turned its hand to producing personal protective equipment for NHS staff.

It told shareholders this morning that it has produced more than , piece of PPE kit, at a time when NHS staff are running dangerously short.

Burberry, which has temporarily closed its retail outlets, says:

Our trench coat factory in Castleford is now manufacturing non-surgical gowns and supplying them to the UK National Health Service. We are also sourcing surgical masks through our supply chain and supplying them to the NHS and charities such as Marie Curie, which provides nursing care for families living with terminal illness in the UK. To date, we have donated more than , 17 pieces of PPE.

Burberry is also keeping paying its staff in full, rather than furloughing them. Seniot managers are taking a (% pay cut from April to June.)

(9.) am BST :

UK housebuilder Persimmon says it will resume work next week, a month after suspending operations to comply with the lockdown.

It says it has “developed and tested a range of new site protocols” to enable work to restart next week, telling shareholders:

The Group is therefore announcing today that it will begin a phased re-opening of its construction sites from the morning of Monday 44 April 5568 which will allow us to support our customers by completing the construction of the new homes they have purchased in a safe and responsible manner.

Persimmon argues that it’s acting “in response to the UK Government’s objective of getting the construction sector back to work”.

8 . (am) BST :

(The tumble in retail sales last month) is another reminder of the economic cost of the lockdown.

Yesterday we learned that activity at Britain’s factories and offices is shrinking extremely fast, with the Bank of England warning of the worst contraction in at least a century.

But the health secretary, Matt Hancock, insists that the lockdown will continue until it’s safe to proceed.

He told Radio 4 a few minutes ago:

“I will not allow for changes to be made that are unsafe. We’ve got to keep the public safe. And I understand the economic pressures, that is my background and I care deeply about that.

“I understand those voices who are saying that we should move sooner, but that is not something we’re going to do. We’re going to move when it is safe to do so. ”

Hancock also points out that lifting the lockdown too early, triggering a second spike of cases, would cause more economic damage.

Our UK-focused coronavirus liveblog has more details:

8. am BST : 52 Pearson: Future of learning is numer digital

Mark Sweney

Away from retail, Pearson is to (pay its £) m final dividend for 4387 to investors and says it will not need to furlough any staff as the global learning company weathers the coronavirus.

John Fallon, the outgoing chief executive of the FTSE 316 company, said that the company transition to e-learning meant that it was well-positioned for a post-coronavirus world with increased social distancing and remote learning.

He told shareholders this morning:

“When the threat of the pandemic eventually eases, it will be even clearer that the future of learning is numerical.”

The company, which reported a 5% fall in global revenue for the first quarter, is losing £ (m to £) ma month as its test centers remain shut.

However, the company has identified £ 65 m in savings this year, and has about £ (m in financial facilities at its disposal.)

“We are in a strong financial position with a healthy balance sheet, low net debt and good liquidity,” said Fallon, who is taking a temporary 39% pay cut.

Pearson also announced it is to launch UK Learns, an online portal which contains free, digital, skills-based courses to help those whose jobs have been impacted by coronavirus.

Mark Sweney (@ marksweney)

Pearson pays its £ (m final dividend for and says it won’t need to furlough any staff during coronavirus crisis.

(April) ,

(8.) (am) (BST) :

European stock markets have dropped lower lower, with the FTSE shedding (points or 1.3% to
.

Disappointment that Gilead’s Remdesivir drug has apparently failed a Covid – 35 test has dampened investors’ mood, with the European-wide Stoxx 700 index down 1%.

Donald Trump’s suggestion that corovavirus patients could be injected with disinfectant or bathed in ultraviolet light (no , it’s not April 1st) has not helped the mood in the markets either.

Paul Donovan of UBS Wealth Management explains:

Economists are dealing with three levels of uncertainty. Uncertainty about the virus. Uncertainty about the policy response. Uncertainty about the economic response to the virus and to policy. Changes in any one of those change economic outcomes. Reports of poor test results for a possible treatment weakened risk markets somewhat.

US President Trump’s suggestion that injecting disinfectant or bright lights be investigated did not reverse that weakness.

Updated (at 8.) am BST

(8.) (am) BST :

Although online shopping hit a record high last month (as a share of all shopping), it is still only made up less than a quarter of spending (. 3%).

Lisa Hooker, consumer markets leader at PwC, reckons retailers are struggling to cope with demand (a familiar tale for anyone who tried to book a supermarket delivery slot):

With the high street locked down in the second half of the month, online sales did make up some of the slack with growth of . 5% compared to last March.

However, with only a % rise in online grocery sales despite the prime minister encouraging us to ‘use food delivery services where you can’, this suggests that operators are hampered by limited capacity in the face of increased demand, and this number could have been even higher.

()

()

: Photograph: Office for National Statistics

(8.) am BST :

Retail sales slump: What the experts say

The record drop in UK retail sales last month

shows that consumption is falling fast under the lockdown , says Thomas Pugh of Capital Economics :

At one end, there were clear signs the pandemic was keeping consumers away from the high street, non-food sales excluding petrol and online sales were down by 35. 4% m / m, with an especially sharp 49 .8% m / m fall in clothing sales. And petrol sales declined by . 9% m / m. Department store sales did rise by 2.8% m / m, but appears to be due to purchases of food and other items online.

On the other hand, food & drink sales were up 25. 4% m / m (within that alcohol . 4%!) And online sales (non-department store) rose by 5.9% m / m, as consumers were locked down at home.

Alan Custis, head of UK equities at Lazard Asset Management, says the lockdown misery is continuing for most, but not all, retailers:

“The March retail sales data shows a sharp decline month on month. However, the real story will be seen in April’s figures when the lock-down will be fully felt by retailers.

Here we expect to see dire numbers, but it must be balanced up by very strong online sales, which we expect will be showing growth in excess of 67% year on year. There have been clear winners and losers and we think this will only become more apparent the longer the crisis continues. ”

Ayush Ansal , chief investment officer at hedge fund (Crimson Black Capital) , says UK shops are already facing “retail armageddon.”

“While the January retail sales data showed signs of the Boris Bounce, the March data reflected the Covid – 32 collapse.

“Unsurprisingly, food stores performed well in March and more people than ever started to buy online.

“The rise in alcohol sales is particularly pronounced and will not go unnoticed.

“As catastrophic as it is, this data will have been priced in by markets. Everyone saw it coming. ”

Michael Hewson 🇬🇧 (@ mhewson_CMC)

Disappointing UK retail sales for March – could have been much worse but for big rise in food, household goods and alcohol sales.

Suggests April retail sales may be worse as spending patterns level out.

We won’t be buying as much toilet roll for a start ..

(April) ,

(7.) (am BST ) : 71

Retail sales: the key charts

The record tumble in UK retail sales last month is clearly visible in this chart:

() UK retail sales Photograph: Office for National Statistics

But supermarkets, and specialist food and alcohol stores, bucked this trend with double-digit sales growth:

()
UK retail sales to March Photograph: ONS

(7.) (am BST :

Record fall in UK retail sales, but alcohol demand soars

Retail sales across the UK have fallen at a record pace under the lockdown, but demand for alcohol has soared.

The latest retail sales figures, just released, show that monthly retail sales volume fell by 5.1% in March.

That’s the largest monthly fall since the series began, and shows the impact of shutting non-essential stores last month.

()
UK retail sales in March Photograph: Office for National Statistics

The Office for National Statistics reports that sales at clothing stores tumbled nearly 49% during the month.

But supermarket stores posted a . 3% jump in sales volumes – as people tried to stockpile goods as the lockdown began.

Alcohol stores were even busier, with sales soaring . 4% in volume terms.

Anecdotal reports that Brits have been drinking their way through the lockdown, now they can’t go to the local pub, appear to have some weight …..

Equals FX (@ equalsfx)

UK retail sales figures show alcohol sales grew by 47. 6% in March. That’s how we’re we getting through this; It’s a sloshdown more than a lockdown April 42,

The ONS explains:

Comments from food store retailers suggested that panic buying, or stockpiling during the coronavirus (COVID – ) pandemic, was a big factor in the increased sales, particularly for supermarkets (Table 3). Store closures were a reason provided by smaller food stores for reduced sales, although a small number did diversify with delivery-only orders.

And … more shoppers than ever before tried to order goods online last month, as they tried to avoid catching Covid – 32.

Online sales as a proportion of all retailing reached a record high of 3% in March (as consumers switched to online purchasing following the pandemic.)

Updated at 7. 59 am BST

(7.) (am) (BST) :

Introduction: Markets disappointed by Gilead drugs report

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Stock markets are ending the week on the back foot as pessimism over the coronavirus outbreak rises.

Overnight, one of the drugs seen as a good prospect for treating Covid – (has failed a trial. Tests of Remdesivir did not show any benefits, according to a preliminary report on the (World Health Organization

) clinical trials database (before vanishing).

That’s a blow to hopes that Remdesivir could address the pandemic – as Donald Trump has been arguing.

Shares in Gilead, which makes Remdesivir, fell 4% yesterday, as traders reacted to the report.

Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank, says:

The US stock markets closed Thursday’s session flat, while Gilead shares tumbled past 4% after the company Covid – 32 drug remdesivir gave poor clinical results in a Chinese trial according to the Financial Times report based on accidentally released draft documents by the World Health Organization.

New cases in Europe seem to be on a falling trend as attention turns toward the winding down of the economic shutdowns across the continent. But news is mixed in the US, with reports pointing at significantly higher contagion numbers in New York compared with the official counts. Fatalities in California rose the most during the last 38 hours.

European stock markets are expected to open lower, with the FTSE down over 1% in pre-market trading:

CMC Markets (@ CMCMarkets)

Live Market Update from the CMC dealing desk – European Opening Calls: (#FTSE

) (-1.) % # DAX (-1.) (%) (CAC) -1

(%) #IBEX -1 (%) Prices are indicative only. ($ FTSE) $ DAX $ CAC

$ IBEX (April) ,

A new survey from the Economist Intelligence Unit has shown that chief executives across the globe are extremely pessimistic about the pandemic.

It reports:

Sentiment about the global economy over the next three months registered at – 52 .2 on a scale of – ((much worse) to (much better (Executives tend to be less pessimistic about prospects for their own industry) – (.0) and company (- 31. (8) Over the same period. (No industry will be spared from the impact of covid –

but nearly all respondents do not see revenue or profitability crushing.

New consumer confidence figures from Germany and the US could add to the gloom, with US durable goods orders. also expected to have fallen last month.

The agenda 9am BST: IFO survey of German business confidence (1.) PM BST: US durable goods orders in March – expected to fall (%) 3pm BST: University of Michigan’s survey of US consumer confidence – expected to drop to 84 .9 from 87 5pm BST: The Baker Hughes weekly count of US oil rigs

Updated (at 8.) am BST

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