Festive Xmas sale
Retail sales increased by 1.3% in November, fuelled by Black Friday discounts and colder weather / Image source: Adobe
  • Next kicks off festive reporting season
  • Scope for upbeat news from B&M
  • Potential Christmas winners include Currys

Retail bellwether Next (NXT) kicks off the post-Christmas reporting season on 4 January followed by discounters B&M European Value Retail (BME) and Shoe Zone (SHOE:AIM) on 9 January.

Investors will be eager to learn if the sector benefited from some last-minute festive shopping when all three companies issue trading updates.

According to the ONS (Office for National Statistics), retail sales volumes increased by a better-than-expected 1.3% in November as Black Friday discounting and the arrival of more seasonal wet and cold weather fueled a golden month for retailers.

However, the big concern for the sector is whether November’s heavy discounting merely brought forward Christmas shopping, leading to disappointing sales in December.

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A pre-Christmas profit warning from Superdry (SDRY) has left investors in other clothing retailers feeling nervous ahead of the New Year updates, although the recent arrival of cooler temperatures should have boosted demand for coats and jumpers at best-in-class retailer Next.

B&M European Value Retail (BME) should also have fared well over the peak selling period, helped by its value proposition appealing to cash-strapped consumers looking for cheaper options when doing their Christmas shopping.

At the time of its strong first half results in November, B&M highlighted improving sales momentum ahead of Christmas suggesting scope for good news when the company delivers its third quarter update (9 January).

Sainsbury’s (SBRY) is the first of the quoted supermarkets to report on Christmas trading when it updates the market on 10 January, with arch-rival Tesco (TSCO) and Marks & Spencer (MKS) to follow on 11 January.

All eyes will be on management comments about sales trends, such as whether hard-pressed shoppers opted for fewer items in their baskets or shunned the big brands in favour of supermarket own-label products amidst the ongoing cost-of-living squeeze.

GREGGS TO SERVE UP GOOD NEWS?

Other noteworthy names scheduled to report include sausage roll king Greggs (GRG), which updates the market on its fourth quarter performance on 10 January.

Back in October, Greggs reported a 14.2% rise in like-for-like sales for the 13 weeks to the end of September, with underlying growth helped by more customer visits, wider adoption of the Greggs App and loyalty scheme, and increased evening trade.

Tech products purveyor Currys (CURY), a possible beneficiary of robust demand for gadgets ranging from laptops and cameras to headphones to gaming headsets and smart toys, updates on Christmas trading on 18 January.

WH Smith’s (SMWH) shops are traditionally packed during December with shoppers loading up their baskets with Christmas TV guides, wrapping paper, books and games and other impulse purchases, so a solid update from the FTSE 250 name looks likely on 26 January.

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Issue Date: 28 Dec 2023