Deutsche Bank expects the UK retail sector to close 2024 on a strong note despite headwinds from falling consumer confidence and rising National Insurance costs following October’s budget.
Positive trends in November and December, including premium spending on food and experiences, disciplined markdown strategies, and increased online shopping, have provided some relief to retailers.
Retailers reporting early in 2025 include Next PLC (LSE:NXT), which is forecast to deliver 4.5% growth in Brand sales and a £10-£15 million upgrade to 2025 profit before tax, though its 2026 guidance may be cautious.
Marks and Spencer Group PLC (LSE:MKS) is projected to see 3.5% growth in clothing and 8% in food sales, while B&M European Value Retail SA (LSE:BME) and JD Sports Fashion PLC (LSE:JD.) are expected to report subdued performance.
Stronger results are anticipated from Currys PLC (LSE:CURY) (+1.7%) and Dunelm Group PLC (LSE:DNLM) (+4%).
Deutsche Bank highlights resilient gross margins despite limited promotional activity and selective discounts in the run-up to the holiday season.