Daily Brief: British Shoppers Might Have Been Out And About, But UK Retail Sales Still Fell

Daily Brief: British Shoppers Might Have Been Out And About, But UK Retail Sales Still Fell

almost 2 years ago3 mins

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Data out on Friday showed that UK retail sales fell last month, even if the country’s shoppers have been swapping slippers for sneakers.

What does this mean?

Brits said farewell to the last of their Covid restrictions in February, and it looks like they couldn’t wait to get out and about: clothing and footwear sales were up 13% from the month before, and fuel sales were up 4%. Unfortunately, that’s where the spending stopped: sales at household goods stores fell by 3%, as home improvement habits ground to a halt. Online retail sales were down 5% too, which means they made up the smallest proportion of overall retail sales since the start of the pandemic in March 2020. All in all, that led overall retail sales to shrink 0.3% from January – a long way off the 0.7% growth economists were expecting.

UK retail sales

Why should I care?

Zooming in: Vote of no confidence.

Shoppers might’ve been buying less, but they spent 0.7% more as inflation in the country continued to climb. No wonder they’re not feeling too hot: data out last week showed UK consumer confidence fell in March for the fourth month in a row, hitting its lowest since the depths of the pandemic in November 2020. And since prices are only set to climb, Brits might be forced to cut back even more in the next few months…

UK consumer confidence

The bigger picture: Softly, softly.

This data suggests the Bank of England might’ve been right to change its tone earlier this month, when it suggested that it might need to go a little easier on interest rate hikes than it thought. Now, though, some economists are speculating that it might not raise rates at all in the second half of this year – especially as another spike in the UK’s Covid cases proves the country’s economy isn’t out of the woods yet.

Keep reading for our next story...

Chinese Electric Vehicle Maker Nio Reported Mixed Results

Nio image

Nio reported a strong quarter for deliveries late last week, as the Chinese electric vehicle (EV) maker proved that it’s not what you know…

What does this mean?

EV makers have been struggling to get their hands on parts recently, but Nio’s been managing better than most. That’s because its EVs are manufactured by the Chinese government-backed Jianghuai Automobile Group – a well-connected firm with the heft to get suppliers on side. And it pulled it out of the bag: Nio delivered 44% more cars than the same time the year before, pushing up its overall revenue by 49%.

Nio deliveries

But none of those parts came cheap, and that extra cost – along with Nio’s ongoing investment in a new product lineup – saw the EV maker post a $340 million loss last quarter. And when it followed up with a worse-than-expected revenue outlook for this quarter, investors didn’t hesitate to send its stock down.

Why should I care?

For markets: Nio’s keeping busy.

Nio’s stock has now lost nearly 40% of its value this year, but the EV maker has a plan to turn things around: it’s aiming to launch three new models this year. One of those – due to be delivered to Chinese buyers this week – is being hailed as a direct rival to Tesla’s Model S, and analysts seem to believe the hype: their average price target for Nio’s stock is now $47 – more than double its current price of $20.

Nio stock
Source: Google Finance

The bigger picture: Anything Tesla can’t do…

Nio has another project on the go too: the EV maker is planning to work with competitor Geely to set up 24,000 Chinese swapping stations – a faster alternative to battery charging – by 2025. It must know something Tesla doesn’t: the US EV maker already experimented with swappable batteries in 2014, only to scrap the project soon after.

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