London pre-open: Stocks to edge down as retail sales miss expectations
London stocks were set to edge lower at the open on Friday as investors digest the latest UK retail sales data.
The FTSE 100 was called to open seven points lower at 7,146
Figures released earlier by the Office for National Statistics showed that retail sales unexpectedly fell in May as restaurants reopened and people shifted some of their spending from food stores.
Retail sales declined by 1.4% on the month, versus expectations for a 1.5% increase.
ONS Director of Economic Statistics Darren Morgan said: "Following a sharp increase last month coinciding with post-lockdown reopening, retail sales dipped slightly in May. However, they remain well above both their pre-pandemic levels and those seen in March before shops reopened.
"Food stores sales suffered as feedback suggested the reopening of hospitality meant consumers took advantage of eating out instead. Household goods stores and garden centres fared well as people spent money on improving their gardens in anticipation of the summer and the lifting of restrictions on outdoor gatherings.
"As customers returned to physical stores, online sales fell in May for the third consecutive month, but remain nearly 60% higher than the level seen in February 2020."
In corporate news, supermarket group Tesco reported a small rise in first quarter like-for-like sales, reflecting the lifting of Covid restrictions as more people started to eat out again.
Group sales were up 1% to £13.3bn for the 13 weeks to May 29. On a two-year basis, before the pandemic struck, sales were up 8.1%. UK sales rose 0.5% to £10bn.
Two-year UK like-for-like growth of +9.3% included the retained benefit of customers consuming more meals at home against the pre-Covid period, which peaked in March at +14.6% and moderated in April/May as restrictions eased, the company said.