BRBY, SBRY, FRAS: Stocks to watch amid shrinking consumer spending

July 19, 2022 09:14 AM BST | By Priya Bhandari
Follow us on Google News:

Highlights

  • With inflation skyrocketing to decades-highs, around 86% of people are now preferring to plan ahead in order to reduce their discretionary spending.
  • According to a report by Grant Thornton and Retail Economics, the UK households, on an average are set to reduce their discretionary spending by £887 through April 2023.

With inflation soaring to the highest level in the last four decades, people are cutting down on non-essential items to manage their expenses. According to a joint report released by Grant Thornton and Retail Economics, around 86% of people intend to reduce their discretionary spending over the year. This will wipe out nearly £25 billion of consumer spending across the economy this year.

The report surveyed 2,000 people in May and revealed that over a third of households are facing financial difficulties and planning to cut back on discretionary spending. Meanwhile, 25% of families said they are currently financially sound but will reduce their spending as a precaution.

UK Households are cutting down on non-essential items to manage their expenses.

Image source: Syda Productions, Shutterstock

Another quarter of households recognised the need to reduce their spending on non-essential items but preferred to borrow or dip into savings. On the other hand, 14% have no plans to cut back on spending.

The report added that around 32% of people plan to reduce most of their spending, while 28% intend to do so across all areas to counterbalance the sharp rise in prices.

Cutting back on expenses will mean switching to cheaper brands or discounters, buying in bulk, or availing of loyalty schemes or vouchers for most households. However, lower-income people have to take more extreme measures, like eating less.

The research also revealed that with the rising cost of living, around two-fifth of people expect an impact on their spending habits until at least the end of the next year.

Amid the cost-of-living crisis and decreasing consumer spending, investors can keep an eye on the following FTSE-listed stocks that may get impacted.

Burberry Group Plc (LON: BRBY)

An FTSE 100 constituent, Burberry Group Plc enjoyed a market cap of £6,512.67 million as of 19 July 2022. The British luxury fashion house hasn’t performed well over the past 12 months, with both its one-year and YTD returns in the negative territory at -15.36% and -8.42%, respectively. The company’s shares were trading at GBX 1,663.00, up 1.22% at 11:09 AM (GMT+1) on 19 July. 

J Sainsbury Plc (LON: SBRY)

J Sainsbury Plc on 19 July was up by 0.28% at around 11:12 AM (GMT+1) and was trading at GBX 216.10. The stocks of the UK’s second-largest supermarket chain have performed poorly over the last year. Both its yearly and YTD returns are currently in the negative territory at -24.08% and -21.63%, respectively. 

Frasers Group Plc (LON: FRAS)

The FTSE 250 constituent, Frasers Group Plc, is a retail and intellectual property group boasts of a market cap of £3,459.63 million as of 19 July 2022. The stock has provided a decent return of 23.06% over the past year. However, its YTD has not given much to cheer about with it being placed at -5.19%. The company’s shares were trading at GBX 731.00, up by 0.90% at around 11:15 AM (GMT+1) on Tuesday.

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.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Limited, Company No. 12643132 (Kalkine Media, we or us) and is available for personal and non-commercial use only. Kalkine Media is an appointed representative of Kalkine Limited, who is authorized and regulated by the FCA (FRN: 579414). The non-personalised advice given by Kalkine Media through its Content does not in any way endorse or recommend individuals, investment products or services suitable for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a qualified financial planner and/or adviser. No liability is accepted by Kalkine Media or Kalkine Limited and/or any of its employees/officers, for any investment loss, or any other loss or detriment experienced by you for any investment decision, whether consequent to, or in any way related to this Content, the provision of which is a regulated activity. Kalkine Media does not intend to exclude any liability which is not permitted to be excluded under applicable law or regulation. Some of the Content on this website may be sponsored/non-sponsored, as applicable. However, on the date of publication of any such Content, none of the employees and/or associates of Kalkine Media hold positions in any of the stocks covered by Kalkine Media through its Content. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music/video that may be used in the Content are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music or video used in the Content unless stated otherwise. The images/music/video that may be used in the Content are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.



Top LSE Listed Companies