Tesco share price analysis as UK retail sales bounce back

July 21, 2023 01:00 AM PDT | By Invezz

Tesco share price analysis as UK retail sales bounce back — Image source: Invezz

UK retail sales rise

The UK economy is going through major headwinds as the cost of living crisis escalates. Data published this week showed that the headline consumer prices remained at an elevated level in June. Inflation stands at 7.9%, higher than the Federal Reserve target of 2.0%.

Still, there are signs that the country’s retail sales are doing well. According to the Office of National Statistics (ONS) showed that the country’s retal sales jumped in June, helped by the warmer weather.

The headline retail sales rose by 0.7% in June, higher than the median estimate of 0.2%. It rose by 0.1% in the previous month. Still, retail sales dropped by 1.0% in June compared to the same month in 2022.

Core retail sales, which excludes food and energy prices, rose from 0.1% to 0.8%. This increase was higher than the median estimate of 0.2%. Core sales dropped by 0.9%, which was better than the expected decline of 1.6%.

Tesco is an important part for Tesco, the biggest retailer in the UK. It is also the biggest grocer in the country. Therefore, a higher retail sales figure is a positive thing for Tesco.

Another important retail news was a report by the Competition and Markets Authority (CMA). In a report, the agency warned UK retailers against profiteering as inflation slipped. On a positive note, CMA said that inflation was not driven by the companies, which reported a fall in operating profits.

In June, as I wrote here, Tesco said that its total sales for the 13 weeks to May 27 jumped by 8.2% to 14.83 billion pounds.

Tesco share price forecast

TSCO chart by TradingView

The four-hour chart shows that the TSCO stock price has made a strong comeback in the past few days. In this period, the stock has moved above the 25-period and 50-period moving averages.

Further, the Relative Strength Index (RSI) has moved to the extreme overbought level of 75. Similarly, the MACD has continued soaring. Therefore, I suspect that the shares will continue rising as buyers target the next psychological level at 270p.

The post Tesco share price analysis as UK retail sales bounce back appeared first on Invezz.

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