Key Economic, Retail Sales & Consumer Spending Trends Presentation

June 2018 Update

INFLATION – CPI & RPI

2.4%

3.3%

2.3%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

Annual Rate of Inflation

CPI RPI CPIH

Source: ONS (Consumer Prices Index Table 2)

Latest Trends: May 2018 CPI = +2.4% RPI = +3.3% CPIH = +2.3%

Additional Figures CBI estimate for 2018

CPI = +2.5% RPI = +3.1%

CBI Outlook for 2019 CPI = +2.2% RPI = +2.7%

Confederation of British Industry June 2018 Update

CPI for May 2018 was +2.4% flat on +2.4% in April Fuel prices increased by the biggest monthly amount since

January 2011, rising by +3.8%

UNEMPLOYMENT

4.6%

4.2%

4.7%

4.3% 4.4%

4.1% 4.0%

4.1%

4.2%

4.3%

4.4%

4.5%

4.6%

4.7%

4.8%

Feb-Apr 2017 May-Jul 2017 Aug-Oct 2017 Nov-Jan 2018 Feb-Apr 2018

3 Monthly Unemployment Rate

All Men Women

Source: ONS (Labour Market Statistics Table 1, +16 and over)

Latest figures from the ONS show that unemployment remained at 4.2%

Wage growth slipped back slightly dampening expectations of an August interest rate rise

Latest Trends: Feb-Apr 2018 All = +4.2% Men = +4.3% Women = +4.1%

Additional Figures CBI estimate for 2018

All = +4.2%

CBI Outlook for 2019 All = +4.3%

Confederation of British Industry June 2018 Update

PAY – INCLUDING & EXCLUDING BONUSES

2.6%

2.6%

2.3%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

3 Month Average Pay Increases

All Pay Private Sector Public Sector

Source: ONS (Labour Market Statistics Table 15 & 16 - 3 Month Average)

Pay (including bonuses) grew by +2.5% on a year earlier, private sector pay grew by +2.6% and public sector pay grew by 2.4%

Regular pay (excluding bonuses) rose by +2.8% on a year earlier

Latest Trends: Feb-Apr 2018 All Pay = +2.5% Private = +2.6% Public = +2.4% Additional Figures CBI estimate for 2018

Avg Earnings = +2.6%

CBI Outlook for 2019 Avg Earnings = +3.1%

Confederation of British Industry June 2018 Update

GROSS NATIONAL PRODUCT - GDP

0.4%

0.2%

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

0.9%

1.0%

20

15

-Q4

20

16

-Q1

20

16

-Q2

20

16

-Q3

20

16

-Q4

20

17

-Q1

20

17

-Q2

20

17

-Q3

20

17

-Q4

20

18

-Q1

20

18

-Q2

20

18

-Q3

20

18

-Q4

GDP Quarter on Quarter Change

Quarter

Source: ONS (Gross Domestic Product Table A2)

The final estimate for GDP for Q1 was +0.2%, up +0.1pp last month

After construction data was found to be stronger than earlier estimates

Latest Trends: Q1 2018 GDP = +0.2% Additional Figures Historic Annual

2014 = +3.1% 2015 = +2.3% 2016 = +1.9% 2017 = +1.8%

CBI Outlook 2018 = +1.4% 2019 = +1.3%

Confederation of British Industry June 2018 Update

RETAIL SALES – VOLUME & VALUE

3.9%

6.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

Retail Sales Year-on-Year Change

Volumes Values

Source: ONS (Retail Sales Table 1 & 2)

Retail sales rose +3.9% in May 2018 vs. May 2017 Good weather and the royal wedding celebrations contributed

to a strong rise in retail sales in the month

Latest Trends: May 2018 Volume = +3.9% Value = +6.3% Sector Analysis

Food Led Stores Vol = +2.8%, Val = +5.0%

Non-Food Led Stores Vol = +3.2%, Val = +4.5%

Non-Store Retailing Vol = +16.2%, Val = +18.4%

Automotive Vol = (0.3%), Val = +7.6%

INTERNET SALES – VALUE

19.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

Internet Year-on-Year Change

Month

Source: ONS (Table ISCPNSA1)

May average weekly Internet sales values were estimated to be £1.26bn up +19.9% vs. May LY

In May 2018 internet sales were 17.5% of all retail sales (excluding auto fuel) vs. 15.4% in May 2017

Latest Trends – May2018 Value = +19.9% Internet Sales by Sector Food = +20.7% Non-Food = +23.7% Non-Store = +17.2%

GROCERY– MARKET & INFLATION

2.1%

1.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

De

c-16

Jan-1

7

Feb

-17

Mar-1

7

Ap

r-17

May-1

7

Jun

-17

Jul-1

7

Au

g-17

Sep

-17

Oct-1

7

No

v-17

De

c-17

Jan-1

8

Feb

-18

Mar-1

8

Ap

r-18

May-1

8

Jun

-18

Jul-1

8

Au

g-18

Sep

-18

Oct-1

8

No

v-18

De

c-18

12 Weekly Grocer Trends

Grocery Market Grocery Inflation

Source: Kantar WorldPanel

Latest 12 week figures saw the Grocery Market grow by +2.1% As wonky vegetables have helped Morrisons remain the fastest

growing of the big four supermarkets

Latest Trends: June 2018 Grocery Market = +2.1% Grocery Inflation = +1.9% Additional Figures Latest growth by retailer

Tesco = +1.4% Sainsbury’s = (0.2%) Asda = +1.8% Morrison’s = +1.9% The Co-op = +2.4% Waitrose = +0.1% Aldi = +8.2% Lidl = +10.0% Ocado = +10.1%

DISCRETIONARY INCOME

£201

£170

£175

£180

£185

£190

£195

£200

£205

£210

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

Average UK Household Weekly Income

Month

Source: Asda Income Tracker

Average family spending power was up £4 a week in May at £201

The East Midlands is the only region where it is still in decline vs. the same quarter last year

Latest Trends: May 2018 Value = £201 +2.1% Additional Figures Annual Averages

2012 = £166 2013 = £167 2014 = £173 2015 = £190 2016 = £198 2017 = £198

No update this month

AVERAGE DEBT – EXCLUDING MORTGAGES

£4,069

£7,744

£3,000

£3,100

£3,200

£3,300

£3,400

£3,500

£3,600

£3,700

£3,800

£3,900

£4,000

£6,000

£6,200

£6,400

£6,600

£6,800

£7,000

£7,200

£7,400

£7,600

£7,800

£8,000

Average Debt – Excluding Mortgages

Personal Household

Source: The Money Charity

On average households in the UK are currently paying £1,850 in annual interest repayments – per person that is £972

Total credit card debt in April 2018 was £2,613 per household, if you paid £63 every month, it would be cleared in 5 years & 4 months

Latest Figures: April 2018 Household = £7,744

Personal = £4,069 Additional Figures Based on April 2018 trends,

the UK’s total interest repayments on personal debt over a 12 month period would have been £50,331bn (billion= 1,000,000,000)

AVERAGE DEBT – INCLUDING MORTGAGES

£30,597

£58,233

£28,000

£28,500

£29,000

£29,500

£30,000

£30,500

£31,000

£55,000

£55,500

£56,000

£56,500

£57,000

£57,500

£58,000

£58,500

Average Debt – Including Mortgages

Personal Household

Source: The Money Charity

The estimated average mortgage debt in April was £123,721 Meaning the average annual interest paid would be £3,081 per

household (based on a rate of 2.49%)

Latest Figures: April 2018 Household = £58,233

Personal = £30,597 Additional Figures Average 1st time buyers

borrowed 3.60 times their income

Average age of a first-time buyer loan was 30

CONSUMER CONFIDENCE

(9)

(14)

(12)

(10)

(8)

(6)

(4)

(2)

0

De

c-1

6

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

Overall Consumer Confidence Index

Source: GfK Consumer Confidence Barometer on behalf of the European Commission

GfK’s UK Consumer Confidence Index was (9) in June down (2) compared to May

As consumers in pre-Brexit UK are less confident about the economic future

Latest Position: June 2018 Index = (9) Additional Figures Historical Indexes

Dec-04 = (3) Dec-05 = (9) Dec-06 = (8) Dec-07 = (14) Dec-08 = (33) Dec-09 = (19) Dec-10 = (21) Dec-11 = (33) Dec-12 = (29) Dec-13 = (13) Dec-14 = (4) Dec-15 = +2 Dec-16 = (7) Dec-17 = (13)