Today’s news in brief-21/6/24
UK retail sales saw a notable increase of 2.9% in May 2024, reversing a 1.8% decline in April. According to the Office for National Statistics, sales volumes rose across various sectors, with clothing retailers and furniture stores rebounding after poor weather in April. Over the three months to May 2024, sales volumes increased by 1.0% compared to the previous quarter, although they were 0.2% lower than the same period last year. Non-food stores experienced a 3.5% rise, the largest monthly increase since April 2021, driven by improved footfall and promotional activities. Online spending values rose by 5.4% in May, contributing to a 3.3% rise in total spending for the month.
The economic strain on Gen Z is highlighted by a survey from RSM UK, showing that nearly a third have no income left after paying for essentials, with 22% having only up to 20% remaining each month. Despite a slight improvement in overall consumer comfort, high interest rates continue to concern Gen Z, especially regarding future spending and housing market prospects. The Bank of England’s decision to keep interest rates at 5.25% for the seventh consecutive month, despite inflation falling to its 2% target, underscores the financial challenges faced by young consumers.
Consumer confidence in the UK has improved, rising three points in June to -14, according to Gfk’s consumer confidence index. This marks the third consecutive month of improvement, with significant gains in perceptions of the country’s economic situation over the past year and the coming year. The Major Purchase Index also saw a modest increase, indicating a slight boost in consumer willingness to make significant purchases. However, the Savings Index dropped by five points, reflecting ongoing financial uncertainties.
Card Factory is set to engage with shareholders after a significant revolt against the reelection of its chair, Paul Moody, who faced a 24.87% vote against him. Despite this opposition, the company has performed well financially, with adjusted pre-tax profits rising 25% to £65.6m in FY24, supported by a 10.3% increase in revenues to £510.9m. Store revenues grew by 8.7%, bolstered by new store openings and enhancements in store layout and customer experience. Card Factory has committed to addressing shareholder concerns and will provide an update on their consultations within six months, adhering to the UK Corporate Governance Code.
