Omicron impacts UK high street: Are these 2 retail stocks still a buy?

Highlights 

• Shoppers’ visits to UK High Street were higher by only 0.8 per cent on Saturday and down by 1.8 per cent on Sunday, compared with the previous week.
• The number of overall shoppers’ visits fell by 25.2 per cent on Sunday, across all retail sites, compared to the pre-pandemic levels in 2019.

It seems high street retail in the UK will witness another subdued Christmas season. Shoppers’ visits to UK high street retailers were higher by just 0.8 per cent on Saturday and down by 1.8 per cent on Sunday, compared with the previous week, according to data from market intelligence company Springboard.

The data is a reversal from the usual trend of witnessing a huge jump in high street shoppers’ footfall ahead of Christmas. This trend reversal comes amid concerns over Omicron’s spread.

According to Springboard’s data, the number of overall shoppers visits fell by 25.2 per cent on Sunday (across all retail sites), compared to pre-pandemic levels in 2019. Moreover, the change in footfall for shopping centres was down by 32.9 per cent compared to 2019.

Additionally, the visits on Saturday across all retail sites were down 18.1 per cent, while Saturday’s change in footfall for shopping centres was lower by 25.2 per cent, respectively.

Given this background, let us take a look at 2 FTSE listed retail stocks and their investment prospects:

1. JD Sports Fashion PLC (LON: JD)

JD Sports Fashion is a UK based sports and fashion retail company. It is a constituent of the FTSE 100 index.

The group retained its A- rating for climate change for the 2^nd year in a row, awarded by non-profit group the Carbon Disclosure Project (CDP). JD Sports also received a B rating for its Water Security by the CDP.

The group’s revenue, for the 26 weeks to 31 July, rose to £3,885.8 million compared to £2,544.9 million the previous year. Its profit before tax, during the period, rose to £364.6 million, from £41.5 million the year before.

Image source: Refinitiv

JD Sports’ shares ended at GBX 198.30, down by 0.85 per cent on 17 December, whereas the FTSE 100 index closed at 7,269.92, higher by 0.13 per cent.

The company’s market cap was at £10,316.27 million, and its one-year return stood at 22.23 per cent as of 17 December.

2. Frasers Group PLC (LON: FRAS)

Frasers Group is a UK based retail company. The group’s revenue in H1 2022, for the 26 weeks to 24 October, increased by 23.6 per cent to £2,339.8 million, up from £1,893.3 million in H1 2021.

It’s H1 2022 reported profit after tax increased by 70.3 per cent to £143.7 million, compared to £84.4 million in the year before.

Image source: Refinitiv

Frasers’ shares ended at GBX 740.50, higher by 0.54 per cent on 17 December, whereas the FTSE 250 index closed at 22,780.38, up by 0.59 per cent.

The company’s market cap was at £ 3,701.27 million, and its one-year return stood at 55.89 per cent as of 17 December.