January snow hits UK retail sales

UK retail sales declined from December to January, surprising economists who had forecast sales to grow at the start of the year.

Figures released today by the Office for National Statistics (ONS) show that the quantity of goods bought in the retail sector dropped by 0.6% from December 2012. Sales volumes also fell by 0.6% from a year ago.

Most downward pressure came from a significant drop in food sales: the quantity bought in the food sector last month was estimated to have fallen by 2.6% year-on-year, to the lowest level since April 2004.

Commenting on the figures, John Longworth, director general of the British Chambers of Commerce, said that although they only represent a single month, the drop in retail sales is a “serious warning” to the government, indicating that more needs to be done to get the economy growing again.

There were contrasting fortunes for smaller and larger retail outlets last month, with large stores seeing sales increase. There was an overall fall in the quantity bought in small stores and the contrast was particularly marked in the food sector.

Smaller retailers told the statistics agency that the heavy snow in the second half of January had affected their sales, while large store retailers reported that some of the increase they had seen in the quantity bought by consumers had come from a rise in online shopping.

Overall, online sales represented 10.1% of all retail spending (excluding automotive fuel) last month and the average weekly spend online was estimated at GBP546.5m, an increase of 8.7% compared with January 2012.

In the food sector the proportion of sales made online rose by 27.1% year-on-year and equated to 3.7% of all food sector sales, the highest on record.

The total amount spent in the retail sector in January 2013 was GBP24bn, unchanged from January 2012, with an average weekly spend of GBP6.1bn. Over the course of the year, the prices of goods sold in the retail sector increased by 0.8%.

Gail and EDF bid for Repsol’s LNG assets in Trinidad and Tobago

Gas utility Gail India Ltd (BOM:532155) has made a non-binding offer together with French EDF SA (EPA:EDF) to buy Spanish Repsol SA’s (MCE:REP) liquefied natural gas (LNG) operations in Trinidad and Tobago, Gail said in a statement.

Oil and gas group Repsol, looking to cut its heavy debt, started the sale of LNG interests in July 2012, including 75% stake in a regasification facility in Canada, 20% in a liquefaction plant in Peru and a 23% in the Atlantic liquefaction plant in Trinidad and Tobago.

It did not say how much it wants for the LNG assets, which it would prefer to sell as a package, rather than separately, news agency Reuters reported.

In a presentation in August 2012, Repsol said these assets had a EUR3.6bn (USD4.8bn) off-balance sheet debt and net debt of EUR1bn.

In September last year, Reuters cited sources as saying that Repsol had received six offers for the LNG operations.

Local insurance groups mull bids for HSBC’s Indian life insurance venture

Indian life insurers HDFC Life, Birla Sun Life and ICICI Prudential Insurance Co are considering a potential deal for the local life insurance joint venture of UK’s HSBC Holdings Plc (LON:HSBA), two sources told the Economic Times.

HSBC, which owns the Canara HSBC OBC Life insurance JV together with local Oriental Bank of Commerce (BOM:500315) and Canara Bank (BOM:532483), has contacted the insurers through its advisors, the report said.

The UK group’s partners in the venture could also agree to exit the JV depending on the price, although they have not made a decision yet, the sources explained to the paper.

An official at Birla Sun Life and a senior executive at ICICI Prudential confirmed interest in Canara HSBC OBC Life, when asked by the Economic Times, while a spokesperson for HDFC Life did not wish to comment.

The JV, ranking 19th in terms of new business income among 24 Indian life insurers, holds a market share of 0.56%, the paper said. It has a paid-up capital of INR9.5bn (USD176m/EUR132m), with HSBC said to be expecting to get at least the return of its capital.

The UK group, holding 26% in the venture, is exiting its insurance operations globally.