An upcoming round of New Year trading statements from the retail sector are predicted to show a subdued end to 2025, that's according to analysts at UK stockbroker Shore Capital.
Analyst Clive Black said mild autumn weather and a late-November Budget weighed on consumer confidence and spending, with clothing and footwear most exposed because “there are mountains of stock to manage”.
He said Black Friday looked “relatively sound”, especially in electrical, but he expects “the magnitude of gross margin investment in markdown and corresponding working capital positions” to be the key theme for apparel groups.
Black noted discounting started early, with Next going on sale on 24 December.
By contrast, Shore thinks home and electrical retailers should have had a steadier quarter. It said AO, Currys and Marks Electrical could post “middling to maybe good” updates, alongside DFS, Dunelm and Victorian Plumbing.
In grocery, the broker expects festive value growth to be driven mainly by price as food inflation eased towards 4.1% in November. It flagged intense competition and below-cost promotions such as 5p vegetables.
Despite the downbeat tone, Black added in the report: “we are not anticipating retail Armageddon”.