MARKET REPORT: Lack of festive cheer on High St as retail suffers

Shares in Britain’s biggest retailers mixed things up yesterday, despite hopes the Christmas period won’t be as bad as feared.

Deutsche Bank said consumers are still splashing out as they celebrate the first prosperous holiday season since Covid hit, even as strikes take their toll.

The broker pointed to bullish trading updates from the likes of Primark owner Associated British Foods, B&Q and Screwfix parent Kingfisher and M&S, while others such as Pets at Home and Currys took a more cautious note.

The overall consumer environment has held up much better than we expected in recent months, with price inflation helping to offset volume pressures.

The analysts added that spending should remain strong in the run-up to Christmas, although the recent cold spell will have raised concerns about heating costs.

Deutsche Bank was bullish on retail giant Next and discount retailer B&M, predicting that both will report “robust sales performance” early next year.

Meanwhile, the broker said AB Foods was poised to come out of the Christmas season as a ‘winner’, with Primark sales on course to boom as consumers look for affordable prices.

There was less to cheer for Boohoo, while clearing excess inventory remained one of the top priorities for Asos, Deutsche said.

“We’ve been talking about a weaker consumer for more than six months now and there’s been little sign of it so far,” the analysts wrote.

It was a hodgepodge for the companies, with some making profits and others losing.

Kingfisher gained 0.04 percent, or 0.1p, to 227.3p, Pets at Home rose 0.2 percent, or 0.6p, to 274p, Currys climbed 2.3 percent, or 1.25p, to 55.7p and M&S added 0.8 percent, or 0.95p, to 121.2p.

Stock Watch – Xpediator

Shares in Xpediator rose 22.3 percent, or 6.75 pence, to 37 pence after it received an “indicative” takeover offer.

The bid was submitted by a consortium that includes investment vehicle Cogels, led by former freight management company boss Stephen Blyth.

The proposal includes a possible offer of 42 pence per share.

Xpediator “remains confident” in its “prospects as a standalone company” but would recommend the cash portion of the offer, if any, to shareholders.

Among the laggards were AB Foods – despite the broker’s upbeat comment – ​​which fell 1.2 percent, or 19p, to 1543p, B&M (0.5 percent, or 2.2p, to 407.1p), Asos (2. 1 percent, or 11p , to 507p), Next (down 0.4 percent, or 22p, to 5508p), and Boohoo (down 1 percent, or 0.38p, to 36.47p).

The FTSE 100 rose 0.13 percent, or 9.31 points, to 7370.62. However, the FTSE 250 fell 0.56 percent, or 104.2 points, to 18,544.76.

British Airways owner IAG apologized after its flights to and from the US and the Caribbean were grounded due to problems with the pilot software.

A spokesman for BA said: ‘Our teams overnight resolved a temporary issue affecting some of our long-haul flight scheduling systems, resulting in delays to our schedule. We are sorry for the disruption to our customers’ travel plans.”

Shares fell 1.7 percent, or 2.22p, to 127.84p. Petrofac fell 3.3 percent, or 2.35 pence, to an all-time low of 70 pence after the rig builder warned its engineering and construction division would be loss-making until 2024.

The division, which has been plagued by pandemic delays, is expected to make a loss of £156m for the year due to cost overruns on a joint venture contract in Thailand. The company warned of a further “small” loss in 2023 before returning to profit in 2024.

For the whole group, Petrofac said losses for this year would be around £82 million.

In a day dominated by acquisitions, Bunzl agreed to buy four companies and sell its UK healthcare division to Netherlands-based Mediq.

The group, which supplies products such as disposable tableware and latex gloves to private companies and the public sector, said its UK healthcare division generated £216 million in revenue in 2021.

Bunzl does not expect to make a profit or loss from the acquisitions and divestments. Shares fell 0.4 percent, or 12p, to 2820p.