UK consumer retreats from high street

 

Friday , 21 April: FTSE indices once again struggled for direction today, despite poor retail sales weakening sterling in early trade. UK blue-chips and FTSE 250 firms flip-flopped between small gains and losses which saw the primary index down almost 3% for the week. The secondary index got off relatively lightly, shaving -0.85% off in the week. The Office for National Statistics reported sales in March falling by -1.8% from the previous month, significantly more than the -0.1% fall predicted by analyst polled by The Wall Street Journal. Compared with March 2016 sales rose only by 1.7%, again, significantly below analysts’ expectations. The news of the UK consumer tightening purse strings saw sterling pare -0.29% against the dollar, whilst the true GBP/EUR impact was harder to assess given the release of a bullish Euro-Zone current account read and strong French PMI data.

Reckitt Benckiser(-0.97%) slipped lower after posting flat like-for-like sales figures and warning on persisting headwinds. The owner of brands such as Dettol, Airwick and Vanish  reported total revenue of £2.64bn for the first quarter of 2017, up 15% at actual exchange rates, including a 15% rise for its Health unit, 18% for the Hygiene unit and 11% for the Home unit. On a like-for-like basis, 3% growth was seen in Hygiene, flat Health performance, a 4% decline in Home, and a 6% decline from the portfolio brands including food. Weaker performance across Europe, North America, and Australasia was attributed to a “significant” decline in foot care brand Amope in the US and declines in Germany, Italy, Australia and New Zealand due to a strong comparator period. Reckitt also reiterated it is exploring a range of options in its strategic review of its Food business, noting its “high performance” but “non-core” attributes. Across the Atlantic, the acquisition of  baby food maker Mead Johnson in the US was noted as progressing well and due to be completed in Q3.

At the close, European indices were mixed with the FTSE 100 -0.06%, the DAX 30 +0.18% and the CAC 40 -0.37%.

Leave a Reply