Should you buy these high-street retail stocks after a record footfall report?

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 Should you buy these high-street retail stocks after a record footfall report?
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Highlights 

  • Consumer footfall in bricks-and-mortar retail outlets grew by about 25% last month, driven by people choosing to spend summer holidays at home, according to Springboard data.
  • Consumer footfall at the high-street retail outlets was 18.6% lower in August 2021 than pre-pandemic levels in August 2019.
  • Retail parks demonstrated the strongest performance and recorded only a 2.4% decline last month in footfall compared to August 2019.

UK high streets and retail parks recorded the highest footfall in August 2021 since the beginning of the COVID-19 pandemic, primarily driven by an increase in domestic tourism and high consumer retail activity. According to the data by Springboard, consumer footfall in bricks-and-mortar retail outlets grew by about 25% last month, driven by people choosing to spend summer holidays at home. Nevertheless, consumer footfall at these outlets was 18.6% lower in August 2021 than pre-pandemic levels in August 2019.

Springboard’s report indicates that consumers are recommencing shopping in-person rather than online post the lifting of COVID-19 restrictions. Retail parks demonstrated the strongest performance and recorded only a 2.4% decline in footfall compared to August 2019. The UK’s high-street retail footfall dropped by 23.5%, while shopping centre footfall declined by 24%. Despite lifting overseas travel restrictions, people in the UK are choosing to holiday at home this summer, which gave an impetus to high-street retailers in the country, especially those located in prime holiday destinations.

Barclaycard had also reported heavy consumer spending on entertainment, leisure, and dining out during the August bank holiday weekend since the Christmas holidays in 2019. Debit and credit card transactions on the weekend increased by 14.4% in 2020 and 9.4% in 2019.

Here we take a look at four high-street retail stocks and explore the investment prospect in them.

Marks and Spencer Group Plc (LON: MKS)

Marks and Spencer Group is a UK-based multinational retailer that sells clothing, home, and food products. For the 19-weeks ended 14 August 2021, Marks and Spencer Group’s revenues grew 29.1% compared to 4% growth in the same period in 2020. The company expects adjusted profit before tax for 2021 to be around £350 million. The company’s revenues in the clothing & home segment registered a growth of 92.2% compared to 2020 and a decline of 2.6% on 2019/20 levels.

Marks and Spencer shares last traded at GBX 184.50, up by 2.79% at the close of trade on 1 September 2021. The company’s shares gave a return of 73.48% in the last one year to shareholders, and the market capitalisation of the company stood at £3,494.23 million.

Boohoo Plc (LON: BOO)

Boohoo is a UK-based online fashion retailer that focuses on 16–30-year-olds. In July 2021, Boohoo partnered with Alshaya Group to build on Debenhams’ presence in the Middle East. 

Boohoo recorded year-on-year revenue growth of 32%, from £367.8 million for the quarter ended 31 May 2020 to £486.1 million in the same period in 2021. The company report net cash of £199.1 million as of 31 May 2021 compared to £276.0 million as of 28 February 2021.

Boohoo shares last traded at GBX 280.70, down slightly by 0.71% at the close of trade on 1 September 2021. The company’s market capitalisation stood at £3,554.66 million.

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French Connection Group Plc (LON: FCCN)

French Connection Group is a company engaged in the retail and wholesale of in-house clothing and accessories designs. For the financial year ended 31 January 2021, the company’s revenues stood at £71.5 million (2020: £119.9m), a decline of 40.4% due to the COVID-19 pandemic-imposed store closures and shrunken demand from wholesale markets. Its retail revenues were reported at £22.5 million, down by 51.8% year-on-year (2020: £46.7 million), due to store closures. Within the retail segment, online sales registered a growth of 7.1% due to high demand for casual clothing and homeware.

French Connection Group shares closed at GBX 21.60 on 1 September 2021. The company’s shares gave a return of 301.67% in the last one year to shareholders, and the market capitalisation of the company stood at £20.87 million.

Superdry Plc (LON: SDRY)

Superdry is engaged in the retailing of clothes and accessories. Superdry recorded revenues of £118.3 million for the Q4 ended 24 April 2021, representing year-on-year growth of 0.8% compared to £117.4 million in 2020. The strong ecommerce presence of the company helped insulate the impact of pandemic related store closures. Its ecommerce revenue registered a year-on-year growth of 26.6% from £32.3 million in Q4 2020 to £40.9 million in Q4 2021.

Superdry shares last traded at GBX 354.50 at the close of trade on 1 September 2021. The company’s shares gave a return of 176.09% in the last one year to shareholders, and the market capitalisation of the company stood at £290.86 million.

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