Retail sales are up, should you buy these FTSE stocks: TSCO, SBRY, PFD?

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Retail sales are up, should you buy these FTSE stocks: TSCO, SBRY, PFD?

 Retail sales are up, should you buy these FTSE stocks: TSCO, SBRY, PFD?
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Highlights

  • The volumes of retail sales surged by 1.4% on a monthly basis after a decline of 1.2% in March, as per the latest ONS data.
  • The jump in sales was mainly attributed to alcohol and tobacco.
  • Earlier today, the results of the GfK survey revealed that the consumer confidence in the country has fallen to its lowest level since 1974. 

Amid falling consumer confidence due to the spiraling cost-of-living crisis, retail sales in the UK have unpredictably gone up in April. While the level of consumer confidence fell even below the 2008 level, when the global financial crisis led to the collapse of the entire global banking system, the volumes of retail sales surged by 1.4% on a monthly basis after a decline of 1.2% in March, as per the latest data released by the Office for National Statistics (ONS). The jump in sales was mainly attributed to alcohol and tobacco.

                                                 Despite the prediction of economists that retail sales would fall, the sales went up               

© 2022 Kalkine Media®

Despite the prediction of economists that retail sales would fall, the sales went up, but this sudden rise may just be a blip in an otherwise gloomy scenario, and the bigger picture still looks quite disturbing. After declining by 0.7% in March, the UK retail sales dropped by 0.3% in the three months to April. In comparison to the previous year, there has been a 4.9% decline in sales volumes, which represents the largest yearly fall since January 2021. 

Earlier today, the results of the GfK survey revealed that consumer confidence in the country has fallen to its lowest level since the record-keeping began in 1974. The headline UK consumer confidence index plunged by two points, from -38 in April to -40 in May. As per recent ONS data, the UK inflation level has climbed to a 40-year high of 9% in April, and may potentially cross 10% by the end of 2022, as per BoE estimates. Amid the rising inflation and falling consumer confidence, UK households are struggling to spend on necessities like food and fuel.

A warning of a fall in profits has been given by leading supermarket chains in the UK, such as Tesco and Sainsbury’s. Companies are also raising the prices to pass on the rising costs to consumers, and recently Premier Foods has also said that it is going to increase the prices of its products. Let’s look at the share price performance of these companies.

 

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The UK inflation level has climbed to a 40-year high of 9% in April, and may potentially cross 10% by the end of 2022

                                                                © 2022 Kalkine Media® 

Tesco plc (LON: TSCO)

The shares of the leading UK-based retailer of groceries and general merchandise, Tesco plc, were up by 1.65% at 11:48 AM (GMT+1) on 20 May 2022, at GBX 259.30. The FTSE 100 firm has given its shareholders a return of 12.04% over the last one year as of 20 May 2022. The company’s market cap stands at £19,405.08 million as of 20 May 2022, and it is currently offering a dividend yield of 4.3% a year.

J Sainsbury plc (LON: SBRY)

The shares of the second biggest chain of supermarkets in the UK, J Sainsbury plc, were down by 1.06% at 11:52 AM (GMT+1) on 20 May 2022, at GBX 234.50. The FTSE 100 firm hasn’t performed well over the last one year, with its return as of 20 May standing ay -11.02%. The company’s market cap stands at £5,542.888 million as of 20 May 2022, and it is currently offering a dividend yield of 1.4% a year.

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Premier Foods plc (LON: PFD)

The shares of the UK-based food manufacturer, Premier Foods plc, were up by 1.02% at 11:55 AM (GMT+1) on 20 May 2022, at GBX 118.60. The FTSE 250 firm has given its shareholders a return of 15.82% over the last one year as of 20 May 2022. The company’s market cap stands at £1,013.16 million as of 20 May 2022.

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