Stocks in focus as retail sales fell in August: Kalkine Media explores

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  • Retail sales significantly declined in August as recession fears forced people to slash spending.
  • This is the first time since 2021 that all retail categories have witnessed a decline in sales.

High prices have forced people to cut down on their expenses. Inflation in the UK was recorded at 9.9% in August, a slight decline from July's 10.1% but still significantly high. The Bank of England (BoE) and several experts have estimated that it will rise further in the coming months, with projections ranging between 13% and 22%.

Amid the high cost of living, retail sales in August declined at the sharpest pace in eight months, according to the latest data from the Office for National Statistics (ONS). Compared to July, sales in physical and online retail stores fell by 1.6%, more than thrice the predictions made by economists. This is the first time in over a year that all retail categories have witnessed a decline in sales.

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The fall indicates the inflationary pressures households face as soaring energy and food bills have put a huge squeeze on their budgets. To make matters worse, wages haven't grown as much as inflation, leading to a real pay fall.

Amid the latest numbers, investors may check out the following London-listed companies and whether they could be good investment options.

Next Plc (LON: NXT

Next Plc retails in clothing, footwear, and home products, holding a market cap of £7,559.32 million. In the first half of the year, the company saw a jump in sales, primarily due to the reversal of COVID-19 restrictions. The company is listed on the benchmark FTSE 100 index. The stock price has slumped by over 27% in the past 12 months and by nearly 30% on a year-to-date basis. The EPS or earnings per share currently are at 5.31.

Ocado Group Plc (LON: OCDO)

Ocado is an online grocery technology provider with a 50% stake in the online grocery store The other 50% is owned by the Marks & Spencer Group. In the 13 weeks to 28 August 2022, the company posted a 2.7% sales growth, reaching £532 million. As of 16 September, the FTSE 100-listed company holds a market cap of £5,362.48 million. Its share value has declined by over 64% in the past year and more than 61% yearly.

Mulberry Group Plc (LON: MUL)

Mulberry Group is a British fashion firm listed on the FTSE AIM All-Share index. The company holds a market cap of £147.19 million, and its stock price has fallen by over 9% in the past year and by more than 28% yearly. It currently has positive earnings per share of 0.08.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


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