Results from some of the UK’s largest retailers have given an insight into how well the UK economy is performing. Analysts and CFD traders are very interested in the health of the UK economy as it struggles to cope with a fall in demand from its neighbours in the eurozone.
The UK’s largest supermarket chain, Tesco, announced disappointing results and a third consecutive quarter slowdown in like-for-like UK sales. In its last quarter of trading Tesco posted a drop in like-for-like sales (excluding fuel, VAT) of 1.5%.
Tesco chief Philip Clarke defended its performance saying that only a small amount of the 1 billion planned investment in improving its existing stores had been spent and that the underlying economic conditions were proving difficult. Financial spread betting participants would have taken note.
Mr Clarke added that Tesco’s performance would have been significantly better if they had included the week building-up to the Queen’s Diamond Jubilee during which Tesco notched up over 1 billion in sales.
Sainsbury’s reported more positive first quarter figures of a like-for-like 1.4% rise in sales. Crucially this figure includes sales from the week before the Jubilee. Justin King described the figures as ‘in line with our expectations’.
Overall, retail sales in April in the UK were poor, falling from a climb of 2% in the previous month to -2.3%. Brighter news came in the form of the latest Niesr GDP estimate which revealed that the UK economy actually grew by 0.1% in the second quarter. If the official figures from the Office for National Statistics backs this up then the UK will have avoided a double-dip recession after all.