2 Retail Stocks to Look at As UK Shoppers Return to Supermarkets Post Reopening

3 min read | May 25, 2021 11:50 PM AEST | By Suhita Poddar

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2 Retail Stocks to Look at As UK Shoppers Return to Supermarkets Post Reopening — Image source: Lizardflms, Shutterstock

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Summary

UK supermarkets got more footfalls in the 12 weeks to 16 May, as the vaccination programme is progressing in full swing.

The average basket size in the UK shrunk for the third month in a row to £22.82.

The latest research from Kantar has shown that shoppers across the nation have visited stores more often as the vaccination programme gathered momentum. The data analytics firm said that the greatest acceleration was seen in the city of London. The research was conducted for the period of 12 weeks to 16 May this year.

During the period, consumers displayed high confidence and made 58 million more visits as compared to what they did during the same period last year.

While the take-home grocery sales were down 0.4 per cent annually, they were still ahead of the 2019 levels. On the other hand, the online sales were 13.4 per cent higher on a year-on-year level for the reference period.

Also Read: Focus On 2 Lesser-Known Retail Stocks as Retail Sales Jump in April

At the same time, the average basket size had shrunk for the third month in a row to £22.82, said Kantar.

The research firm also noted that the UK grocery price deflation was 1.2 per cent for the 12-week period. It was seen as the fastest drop in prices since the month of August 2016.

As far as the performance of UK’s supermarket groups was concerned, Asda’s sales were up 1.9 per cent on a year-on-year basis for the mentioned period. Sales for Sainsbury's were up 0.7 per cent, for Morrisons it was up 0.3 per cent, and for Tesco the sales growth was flat for the period on a y-o-y basis.

Also Read: 5 Diversified Retail Stocks to Look for in May

Ocado Group Plc (LON: OCDO)

Earlier in February, the company released its full year results for the 52 weeks ended 29 November 2020. The retail revenue grew 35.3 per cent to £2,188.6 million (FY 2019: £1,618.1 million). The EBITDA for the retail segment jumped 265.8 per cent to £148.5 million for the year.

Ocado shares (LON: OCDO) were 2.37 per cent higher at GBX 2009.00 in London on Tuesday afternoon.

Also Read: UK retail sales see record jump in April 2021 as consumers flock for shopping

Tesco Plc (LON: TSCO)

The company released its financial results for 2021 last month. Its FY 2021 profits were down 19.7 per cent to £825 million for the year, while its group sales were up 7.1 per cent to £53.4 billion for the period. The diluted EPS remained the same as the previous year at 7.54 pence. Ken Murphy, Chief Executive at Tesco, said that the company displayed exceptional resilience during the pandemic period.

Tesco shares were down 0.38 per cent post in the noon to GBX 225.75 at the London Stock Exchange on 25 May.

Also Read: Regulatory Action: Tesco Fined £7.56 Mn, CMA Examines Sale of Arm Holdings

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