KGF, NXT, GRG: Stocks you may closely watch with rising retail inflation

Highlights

• Shop price inflation rose to 2.8% in May to its highest rate in more than a decade as the cost of energy, commodity, food, and transportation continued to climb.
• Food inflation surged to 4.3% from 3.5% in April, hitting its highest since April 2012 and the non-food inflation fell to 2% in May as compared to 2.2% the month before.

UK consumers may face greater challenges in the coming months as shop price inflation accelerated to 2.8% in May at the fastest rate in almost 10 years.  Food inflation surged to 4.3% from 3.5% in April, hitting its highest since April 2012 and the non-food inflation fell to 2% in May as compared to 2.2% the month before.

©2022 Kalkine Media®

The latest shop price index from the British Retail Consortium (BRC) and NielsenIQ revealed that the shop price annual inflation rose to 2.8% in May from 2.7% in April, the biggest annual increase since July 2011. This in turn pushed the Bank of England (BoE) towards tighter monetary policy.

According to the shop price index, fresh food inflation surged to 4.5% from 3.4% the month before, its highest level since November 2012. Farmers have voiced their concerns that they are struggling with an increase in the cost of fertilizer since the Russia-Ukraine crisis and an increased labour cost since Brexit. The prices of shelf-stable food increased from 3.5% in April to 4% in May.

Customers have already been warned that they will face a further increase in prices due to high street and online price hikes.

Let us take a look at 3 FTSE-listed retail stocks that investors may watch and invest in sensibly considering other factors.

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1. Kingfisher Plc (LON: KGF)

With a market cap of £5,316.03 million as of 1 June 2022, the multinational home improvement company has delivered a good first quarter of trading, where like-for-like sales were 16.2% up from its pre-pandemic level due to strong market share gains. It has estimated its adjusted profit before tax to be around £770 million for FY2022/23.

The share value of the FTSE 100 listed retailer has depreciated by 26.07% in the last one year. Its shares were trading at GBX 266.40, up by 1.06% at 10:00 AM (GMT+1), as of 1 June 2022.

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2. Greggs Plc (LON: GRG)

UK’s food-on-the-go retailer Greggs Plc offers a range of fresh bakery products, sweets, and drinks. In the first 19 weeks of this year (till 14 May), the company has reported growth in its like-for-like sales by 27.4%. The total sales were £495 million as compared to £378 million in the same period of 2021.  

The share value of the FTSE 250 listed retail company has depreciated by 8.60% in the last one year. Its market cap was £2,307.12 million, as of 1 June 2022. Its share was trading at GBX 2,278.00, up by 0.62% at 10:00 AM (GMT+1), as of 1 June 2022.

©2022 Kalkine Media®

3. Next Plc (LON: NXT)

The multinational retailer of footwear, clothing, home, accessories, and beauty products has recently reported its full-price sales to 30 April 2022 were up by +21.3% as compared to last year. It has maintained guidance for the full-year pre-tax profit at £850 million, which would be up +3.3% as compared to 2021. Its current market cap is £8,450.08 million, as of 1 June 2022.

The shares of the FTSE 100-listed company were trading at GBX 6,572, up by 1.45%, at 10 AM (GMT+1). The share value of the retail company has depreciated by -19.59% in the last one year, as of 1 June 2022. Its year-to-date returns stood at -19.51%.

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.