Deutsche Bank has flagged a sluggish start to the retail earnings season, with UK-listed names confirming fears that consumer spending faltered in the run-up to Christmas.
Most retailers reported a sequential slowdown in December, driven by lower footfall, lingering cost-of-living pressures, and weaker consumer sentiment following the late Autumn Statement.
Tesco PLC (LSE:TSCO) slipped 6% and J Sainsbury PLC (LSE:SBRY) fell 5% after both saw slower-than-expected festive trading, particularly in general merchandise at Argos.
A bigger surprise came from Associated British Foods PLC (LSE:ABF), down 12%, after it flagged unexpected weakness at Primark in continental Europe, especially in France, Italy and Germany.
Deutsche said it's too early to tell whether this is a Primark-specific issue or a broader trend, though the read-across to other European names like 3i’s Action is raising concerns.
The most notable UK outperformers so far include Marks and Spencer Group PLC (LSE:MKS), which rose 8% after holding full-year guidance, and Next, up 6% on an upgrade following strong fourth-quarter trading. B&M also gained 6%, buoyed by hopes it could replicate M&S’s rally. On the downside,
In luxury, Pandora sank 14% after an unscheduled profit warning. More broadly, the sector was stable, with Hermès and Kering both gaining around 5%.