MARKET REPORT: High Street is back in fashion as retail sales get a boost

Retailers led the London stock market higher after the High Street showed signs of life.

Amid the doom and gloom of Jeremy Hunt’s gloomy fall statement, official figures showed retail sales rose 0.6 percent last month.

That followed a 1.5 percent drop in September, when many shops closed on the day of the Queen’s funeral.

It was a stronger-than-expected recovery, and while sales were still below pre-pandemic levels as rising prices eat away at household budgets, stocks in the sector rose.

Frasers Group, which owns Sports Direct, whose brands also include House of Fraser, Flannels and Jack Wills, rose 5.9 percent, or 46 pence, to 823 pence, while JD Sports rose 4.3 percent, or 5 pence, to 119 .6 pence and B&Q and Screwfix parent company Kingfisher gained 3.4 percent, or 8.1 pence, to 246 pence.

The rise in retail sales – and stock prices – provided some much-needed calm after the Chancellor announced £55bn in tax increases and austerity and warned that Britain was already in recession. But it wasn’t all good news on the retail front. Online fashion retailer Asos fell 2.6 percent, or 18.5 pence, to 703.5 pence after analysts at Stifel gave it a sell rating.

With the World Cup kicking off this weekend, Stifel said the UK retail industry should get a boost in food and drink sales.

However, it estimates that spending will be about 40 percent lower than last year’s European Championships due to the timing of the tournament in the winter and pressure on living standards from skyrocketing inflation. It also warned that England may not do as well this time around as they have reached the final of the European Championship.

AJ Bell financial analyst Danni Hewson also struck a cautious tone, saying, “October should be the start of the golden quarter for retailers, the period when they’re lining the aisles and ringing cash registers. But retailers are unlikely to feel the revelry right now and with the recession already upon us, it seems unlikely we’ll see a similar increase in sales in the coming months.

“Even the imminent arrival of Black Friday is unlikely to generate huge revenue. People will be looking for bargains, but they will have a clear idea of ​​what they want to buy and how much they can afford to spend. Due to the tight budgets, they are less likely to be lured by shiny offers if they do not score well.’

At Marks & Spencer, shares rose 2.3 percent, or 2.9 pence, to 123.5 pence after the retail giant announced a new chief financial officer.

Jeremy Townsend, who held the same position at leading pest control company Rentokil, will join next Tuesday.

Meanwhile, SSP, the owner of the Upper Crust and Caffe Ritazza, fell 1.3 percent, or 2.7 pence, to 208.2 pence after UBS cut the airport caterer’s target price from 355 pence to 325 pence.

In the broader market, the FTSE 100 rose 0.53 percent, or 38.98 points, to 7,385.52, while the FTSE 250 rose 0.84 percent, or 160.74 points, to 19,283.05.

MJ Gleeson fell 5.1 percent, or 19 pence, to 355 pence after becoming the latest homebuilder to see an increase in cancellations and a slowdown in demand since Kwasi Kwarteng’s mini-Budget in September.

The number of homes that customers have reserved on each of its Gleeson Homes sites has fallen from 0.42 a year ago to 0.26 in the past six weeks, it said.

The cancellation rate rose to 41 percent over the same period, compared to 20 percent in the first ten weeks of the year.

In the latest board change, packaging giant DS Smith rose 0.6 percent, or 1.9 pence, to 306.4 pence after it snatched Biffa’s finance boss.

Richard Pike, who held the same position at the waste management company for four years, will join DS Smith next year. Biffa rose 0.10 percent, or 0.4 pence, to 407.2 pence.