Stronger Christmas sales was good news for Morrisons this morning (see more below). However other recent retail results – think Debenhams, Mothercare etc – cast some deep shadows. The British Retail Consortium is pointing to a sharp downturn in festive 2017 spending: like-for-like sales were up just +0.6% in December compared to 2016’s +1% sales climb in the same month. A -40% fall-off. Also, sales of non-food was down -3.7% in the last quarter. A very steep drop.
It’s figures like these that point to the real state of UK consumer confidence and its impact on UK retailers, particularly weaker ones. And as the Brexit uncertainty continues and wages, in real terms, continue to fall, retail confidence can only worsen. Volatility will increase.
Overnight in Asia the New Year buying spree continued with all Asian markets seeing climbs, from Singapore (+0.42%) to Tokyo (+0.57%). It was a bit more muted in Hong Kong with the Hang Seng up +0.27% while the Shanghai Composite was up just +0.11%.
Japan’s Topix index ended +0.5% up – a 26-year high – while there was also better news on Japanese wages which were up in real terms in November though one economist speaking to the FT attributed this, in part, to increased overtime earnings as opposed to a more permanent change.
Overnight the pound was -0.01% down at 1.3562 while the dollar was -0.25% down against the yen at 112.77. Little change for the euro against the dollar at 1.1967.
- UK FTSE 100 7,696.51 -0.36%
- DAX 13,367.78 +0.36%
- CAC 40 5,487.42 +0.30%
- Dow 25,283.00 -0.05%
- S&P 500 2,747.71 +0.17%
- Nasdaq 7,157.39 +0.29%
- Nikkei 225 23,849.99 +0.57%
- Gold 1,319.00 -0.12%
- Oil WTI 62.15 +0.68%
Morrisons Premium range boosts Christmas sales
Morrisons appears to have managed the Christmas sales period effectively with sales up +2.8% for the ten weeks to 7 January – though this figure climbs to +3.7% over the Christmas and New Year period.
Sales of its ‘Best’ premium range were up +25% claims Morrisons while online sales were up +10%. "Our plans,” says boss David Potts, “to become a broader and stronger business are progressing well, with another period of positive like-for-like sales and the start of the rolling programme to supply McColl's."
Morrisons shares are up +3.1% in the last week but down more than -7% in the last six months at 226.50p. Over a five-year period they are down more than -10%.
2017 was a land-buying spree for Persimmon: Shutterstock
Persimmon sales surge +9% to £3.4bn
Housebuilder Persimmon announced this morning a +9% climb in revenues to £3.4bn with an average +3% rise in selling price to £213,000 compared with £206,765 last year.
Persimmon also claimed its pre-tax profits for the year will be “modestly ahead” of market consensus. It claims to have bought 17,300 plots of new land at "strong margins" in more than 80 locations across the UK in the last year.
All grist to the mill for boss Jeff Fairburn, set to pick up a £110m bonus. “Over the last three years," said Persimmon this morning, "we have opened six new offices, raising the number of regional house building businesses within the Group from 24 to 30 demonstrating our commitment to increasing supply where there is good demand.”
However housebuilders will not be cheered by gloom from the latest Halifax House Price Index which saw a -0.6% dip in December house prices, snipping annual growth. Nationwide recently reported a similar state of UK house price lethargy.
Breaking news: Majestic Wine claims a +3.2% sales surge over the 10-week Christmas sales period to 1 January.