Retailers led the stock market in London higher after the High Street showed signs of life.
Amid the doom and gloom of Jeremy Hunt’s bleak Autumn Statement, official figures showed retail sales rose 0.6 per cent last month.
That followed a 1.5 per cent fall in September when many stores shut their doors on the day of the Queen’s funeral.
Best foot forward: Amid the doom and gloom of Jeremy Hunt’s bleak Autumn Statement, official figures showed retail sales rose 0.6 per cent last month
It was a stronger than expected recovery, and although sales were still below pre-pandemic levels as rising prices gnaw away at family budgets, shares in the sector rose.
Sports Direct owner Frasers Group, whose brands also include House of Fraser, Flannels and Jack Wills, was up 5.9 per cent, or 46p, to 823p, while JD Sports rose 4.3 per cent, or 5p, to 119.6p and B&Q and Screwfix parent Kingfisher gained 3.4 per cent, or 8.1p, to 246p.
The rise in retail sales – and share prices – provided some much needed respite after the Chancellor outlined £55billion of tax rises and spending cuts and warned that Britain was already in recession. But it was not all good news on the retail front. Online fashion chain Asos fell 2.6 per cent, or 18.5p, to 703.5p after analysts at Stifel gave it a ‘sell’ rating.
With the football World Cup kicking off this weekend, Stifel said the UK’s retail sector should enjoy a boost to food and drink sales.
However, it estimates that spending will be around 40 per cent lower than in the European Championships last year due to the timing of the tournament in winter and the squeeze on living standards from sky-high inflation. It also warned that England may not do as well this time around, having reached the final of the Euros.
AJ Bell financial analyst Danni Hewson also struck a cautious tone, saying: ‘October is supposed to be the start of the golden quarter for retailers, the period when they deck the halls and send tills ringing. But retailers are unlikely to be feeling the festive cheer at the moment and with recession already upon us it seems unlikely we’ll see a similar rise in sales over the coming months.
‘Even the imminent arrival of Black Friday is unlikely to generate huge revenue. People will be looking for bargains but they’ll have a clear idea of what they want to buy, and how much they can afford to spend. The squeeze on budgets mean they are less likely to be lured by shiny offers if they don’t hit the mark.’
Over at Marks & Spencer, shares rose 2.3 per cent, or 2.9p, to 123.5p after the retail giant announced a new finance chief.
Jeremy Townsend, who held the same role at the blue-chip pest control firm Rentokil, will join will next Tuesday.
Meanwhile SSP, the owner of the Upper Crust and Caffe Ritazza, fell by 1.3 per cent, or 2.7p, to 208.2p after UBS cut the airport caterer’s target price to 325p from 355p.
On the wider market, the FTSE 100 was up 0.53 per cent, or 38.98 points, to 7,385.52, while the FTSE 250 rose 0.84 per cent, or 160.74 points, to 19,283.05.
MJ Gleeson fell 5.1 per cent, or 19p, to 355p after it became the latest housebuilder to see a surge in cancellations and a slowdown in demand since Kwasi Kwarteng’s mini-Budget in September.
The number of houses that customers reserved on each of its Gleeson Homes sites dropped from 0.42 a year ago to 0.26 in the past six weeks, it said.
Cancellation rates in the same period jumped to 41 per cent compared to 20 per cent in the first ten weeks of the year.
In the latest boardroom shuffle, packaging giant DS Smith rose 0.6 per cent, or 1.9p, to 306.4p after it poached Biffa’s finance boss.
Richard Pike, who held the same role at the waste management firm for four years, will join DS Smith next year. Biffa nudged up 0.10 per cent, or 0.4p, to 407.2p.