NXT, JD., FRAS: Stocks to watch as disposable household income slumps

June 30, 2022 12:30 PM BST | By Abhishek Sharma
 NXT, JD., FRAS: Stocks to watch as disposable household income slumps
Image source: Stokkete, Shutterstock

Highlights:

  • Disposable household income fell by 0.2% in the first quarter of 2022, as per data from ONS.
  • This was the fourth straight quarterly fall, making it the longest period ever since the records began.

Millions of people in the UK are troubled by the cost-of-living crisis. A major rise in inflation levels in the past few months has pressurised the economy, which was already plagued by the effects of the COVID-19 pandemic and Brexit. It suffered an additional burden from the Russia-Ukraine crisis as the disruption in supply chains raised the input costs for businesses, leading to price hikes.

However, the wages have failed to catch up with the rising prices. According to the latest data from the Office for National Statistics (ONS), British households saw their disposable income squeeze between January and March this year. 

In the first quarter of 2022, the gross disposable income grew by 1.5%. However, it was offset by the 1.7% quarterly inflation, which means that the real disposable household income saw a 0.2% decline.

This is the fourth consecutive quarter that the household income has slumped, making it the longest period since the records began.

Millions of people in the UK are troubled by the cost-of-living crisis

©2022 Kalkine Media®

The Bank of England, in its monetary policy report for May, had said that households are most likely to save less due to the high inflation levels and use their existing savings to pay for the additional expenses. Notably, household savings as a proportion of household resources grew significantly during the COVID-19 pandemic. 

Consumer spending habits have also seen a shift due to inflation. A survey conducted by the ONS recently showed that credit and debit card spending fell by two percentage points to 100% of its pre-pandemic levels of February 2020 average in the week to 16 June 2022. The falls were recorded in social, delayable, and staple spending.

In the wake of this data, let's explore the stocks of some London-listed high-street retailers.

Next Plc (LON: NXT)

The company retails in clothing, footwear, and home improvement products. With a market cap of £7,758.56 million, shares of Next were trading at GBX 5,724.00, down 4.15%, as of 11:37 am GMT+1 on 30 June 2022. The share price has witnessed a significant fall in the past six months, slipping by about 30%, while the one-year return currently stands at -26.85%. The earnings per share from the stock are presently at 5.31.

JD Sports Fashion Plc (LON: JD.)

The company sells branded sports fashionwear, footwear, accessories, leisure goods, and sports apparel. Its shares were down by 3.10% at GBX 112.40 as of 11:41 am GMT+1 on Thursday. Over the past 12 months, the share value has declined by 38.62%. The company is listed on the FTSE 100 index and holds a market cap of £5,983.44 million.

Frasers Group Plc (LON: FRAS)

The firm sells sports and leisure clothing, footwear, apparel, and equipment through its retail stores. It is listed on the FTSE 250 index and has a market cap of £3,215.31 at present. Frasers' stock was trading at GBX 654.50, down by 2.53%, as of 11:47 am GMT+1 on 30 June 2022. The share value has appreciated by 7.47% in the past 12 months, however, it has declined by over 15% on a YTD basis.

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.


Sponsored Articles


Investing Ideas

Previous Next