Sainsbury's Sales Slow Despite Euro 2024 Boost; Eurozone Inflation Expected to Slow

In both the United States and the United Kingdom, retail sales have experienced declines, raising concerns about the overall health of the economy and the impact of inflation on consumer spending. In the US, retail sales fell by 0.1% in October, marking the first decline since March [15ad46b8]. However, this decline was lower than expected, and sales at restaurants and supermarkets remained strong [2e4be436]. Despite concerns, the Federal Reserve sees this decline as a positive indicator that spending isn't accelerating and there are no significant signs of economic weakness [2e4be436]. Experts predict a solid 4% increase in sales during the holiday shopping season [15ad46b8].

In the UK, retail sales volumes fell unexpectedly in October, dropping 0.3% month-on-month [d1bf6510]. Retailers attributed the decline to the cost of living, reduced footfall, and wet weather [d1bf6510]. These figures indicate a risk that GDP could be revised lower to show a negative reading [d1bf6510].

Despite these declines, both countries have shown resilience in consumer spending. In the US, retail sales represent a significant portion of consumer spending, which drives overall economic activity [2e4be436]. The data suggests that despite economic pressures and higher borrowing costs, consumers are showing resilience in their spending habits [ac8834d2]. Similarly, in the UK, the impact of the decline in retail sales on the economy remains to be seen, but it highlights the importance of consumer spending in driving economic growth [d1bf6510].

According to a report by MPB and Retail Economics, 71% of consumers in the UK, US, France, and Germany bought or sold used goods in the past year [7f032c54]. The report surveyed 6,000 households and found that 63% of consumers purchased used items at least once a month. The most popular categories for recommerce were fashion, technology, and homeware. The research forecasts an 80% increase in the growth of the recommerce market across the four countries. The UK recommerce market is currently valued at £6.5 billion and is expected to rise to £12.4 billion in the next 5 years [7f032c54]. The report highlights the shift in consumer behavior towards recommerce and the potential for retailers to tap into this growing market.

Sainsbury's, a major UK retailer, experienced a slowdown in sales despite a boost from Euro 2024. Sales slowed to 2.7% in the 16 weeks to 22 June, down from 4.8% in the previous quarter [e8dd9cb7]. The poor weather and cost of living crisis contributed to a tough trading backdrop for Sainsbury's clothing and general merchandise. Additionally, sales at its Argos chain were down 6.2% in the latest quarter [e8dd9cb7]. Food sales growth also eased to 4.8% from 7.3% as inflation across the market eased [e8dd9cb7]. Eurozone inflation is expected to have fallen slightly to 2.5% in June from 2.6% in May [e8dd9cb7].

The theme that emerges from these stories is the resilience of consumers in the face of economic challenges. Despite declines in retail sales, consumers continue to spend, supporting economic activity and indicating a level of confidence in the economy. This resilience is crucial for both countries as they navigate uncertain economic conditions and strive for growth and stability.