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UK retail sales nudged upwards in July as growth in online retail boosted overall sales volumes.

Retail sales volumes rose by 0.3% in July 2022 following a fall of 0.2% in June 2022 and are now 2.3% above their pre-coronavirus February 2020 levels, albeit down over the past year.

The rise in July contrasts with a 1.2% drop in the three months to July 2022, as sales volumes fell by 1.2% over the three month period when compared with the previous three months.

Compared with the same period a year earlier, retail sales volumes fell by 4.9% in the three months to July 2022, while sales values rose by 5.5% - reflecting implied inflation of 10.4%.

Non-store retailing (predominantly online retailers) sales volumes rose by 4.8% in July 2022, with feedback from online retailers suggested that a range of promotions in July 2022 boosted sales.

Food store sales volumes rose by 0.1% in July 2022, with sales volumes now 0.1% below their February 2020 levels. In recent months, grocery retailers have highlighted that they are seeing a decline in volumes sold because of increased food prices and cost of living impacts.

Automotive fuel sales volumes fell by 0.9% in July 2022, with anecdotal evidence that the heatwave across parts of the UK may have reduced travel and sales.

Non-food stores sales volumes fell by 0.7% over the month because of falls in other non-food stores (-1.5%), and clothing stores (-1.2%).

The proportion of retail sales online rose to 26.3% in July 2022, from 25.3% in June 2022; despite this pick-up, it continues a broad downward trend since its peak in February 2021 (37.5%), but remains above pre-pandemic levels (19.8% in February 2020).

Morning update

Just Eat has agreed to sell its 33% stake in Brazalian food delivery operation iFood for a sum worth up to €1.8bn.

It will sell its stake to iFood’s majority owner (and one time Just Eat suitor) Prosus for €1.5bn and a further €300m contingent on the performance of the online food delivery sector over the next twelve months.

Just Eat said the deal represents an equity multiple of over 5 times on the investments over the life of the joint venture.

The group said it remains focused on improving its profitability and on a disciplined allocation of capital.

It will retain the transaction proceeds to maintain its balance sheet strength and to service repayments of its upcoming debt maturities.

The sale is subject to shareholder approval, with a vote expected to take place in the fourth quarter.

Just Eat has also agreed to a break fee in the amount of €35 million, which will become due and payable if it becomes clear the deal will not happen before 17 February 2023.

The transaction is anticipated to be completed in the fourth quarter of 2022.

Meanwhile, Just Eat, together with its advisors, continues to actively explore the partial or full sale of US delivery arm Grubhub.

Elsewhere this morning, consumer confidence has hit its lower level on record amid acute concerns in the face of soaring cost-of-living and bleak economic prospects.

GfK’s long-running Consumer Confidence Index decreased three points in August to -44 – its lowest level since the index began in 1974 – with all five measures down from July’s figures.

The index measuring changes in personal finances over the last 12 months fell two points to -25, while the forecast for personal finances over the next 12 months has decreased five points to -31.

Meanwhile, Expectations for the general economic situation over the coming 12 months have deteriorated with a three-point drop to -60; this is 54 points lower than August 2021.

The measure for the general economic situation of the country during the last 12 months is down two points at -68, which is 26 points lower than in August last year.

Joe Staton, client strategy director, GfK said: “A sense of exasperation about the UK’s economy is the biggest driver of these findings.

“These findings point to a sense of capitulation, of financial events moving far beyond the control of ordinary people. With headline after headline revealing record inflation eroding household buying power, the strain on the personal finances of many in the UK is alarming.

“Just making ends meet has become a nightmare and the crisis of confidence will only worsen with the darkening days of autumn and the colder months of winter.”

On the markets this morning, the FTSE 100 has opened up 0.1% to 7,549.1pts.

Just Eat Takeaway shares have soared 25.3% so far this morning to 1,761.6p. Other risers include Premier Foods, up 4% to 119.8p, Deliveroo, up 2% to 90.7p and Kerry Group, up 1.9% to €106.85.

Fallers include Bakkavor, down 6.5% to 96.9p, Pets at Home, down 2.6% to 347.4p and Greggs, down 1.9% to 1997p.

Yesterday in the City

The FTSE 100 closed up 0.4% to 7,541.8pts yesterday.

Risers included McBride, up 7.1% to 22.5p, Glanbia, up 6.9% to €12.66, PayPoint, up 4.2% to 625p, Finsbury Food Group, up 2.9% tp 71.5p, Coca-Cola HBC, up 1.6% to 2,084p and Compass Group, up 0.9% to 1,969.5p.

Fallers included THG, down 7.4% to 63.9p, Just Eat, down 3.7% to 1,405.8p, Science in Sport, down 3.2% to 30.5p, Deliveroo, down 2.4% to 89p, Pets at Home, down 2.3% to 356.8p and Ocado, down 2.3% to 901p.