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Ocado and M&S in focus as households return to pre-pandemic grocery trends

Published: 13:55 13 Sep 2021 BST

Ocado Group PLC -

Before Apple Inc (NASDAQ:AAPL) grabs the headlines with its iPhone 13 launch, retailers, particularly grocers, are going to be the main focus on Tuesday morning as supermarket industry data is published, along with a trading statement from Ocado and results from JD Sports.

Grocery sales data from Kantar should reveal whether consumers continue to return to pre-pandemic habits and how many are continuing to do their weekly food shop online.

A month ago, it was calculated that just over 20% of the population bought groceries online in latest four week period, the lowest level seen since October last year.

Total grocery sales were down 4% in the month, although still a tenth higher than in 2019.

Ocado Group PLC (LSE:OCDO) and Marks & Spencer Group PLC were in focus as their UK joint venture, Ocado Retail, saw its first sales decline on record, a fall of 0.7%, though sales levels are up 44% on two years ago.

Is Ocado past its selling date?

The Ocado Retail joint venture’s management will have further opportunity to give their side of the story with a trading update also being posted tomorrow.

Analysts at Barclays expects the third-quarter statement to confirm the drop, namely around a 1.2% fall in revenue compared to last year, compared to 5.4% growth in the second quarter and 39.7% in the first.

“A fall in sales would be unprecedented, but needs to be seen in the context of capacity limits and fire disruption,” said the bank.

Indeed, last year’s pandemic-boosted sales were also unprecedented.

JD Sports flexing some interims

Half-year results from JD Sports Fashion PLC (LSE:JD.) (LSE:JD.) will show how some other retail trends have been performing after the easing of restrictions.

House broker Peel Hunt reckons there will be a strong performance on both sides of the Atlantic, helped by stimulus cheques being spent in US stores in early summer.

“In the UK, we expect that the early promise post restart 3 has persisted as well,” analysts said.

“Europe has been less rosy, with duties and slower post-Covid-19 bounce-backs, but in general this should be a strong set of group numbers, and the risk to full-year forecasts remains to the upside.”

The market will also want to hear updates on the Footasylum saga, after the FTSE 100 group was hit by a competition ruling that could force it to sell it back.

“It’s a blow to the company’s quest for dominance in the sportswear market which had seen its share price soar. The clock is ticking on providing alternative remedies to the sale, with views on the provisional ruling due by the end of next week,” analysts at Hargreaves Lansdown commented.

“JD Sports’ argument put forward to hang onto Footasylum is that direct competition is increasing from brands like Nike who have capitalised on the shift to digital sales by selling direct to shoppers. But JD is also now a formidable online powerhouse, with heavy investment into e-commerce and a two-year deal with Clipper Logistics signed to improve efficiency in its fulfilment operations.”

Significant announcements on Tuesday 14 September:

Finals: Diurnal Group, MJ Gleeson, Petra Diamonds

Interims: Accesso Technology PLC, Bluejay Mining PLC, Corero Network Security PLC, Filta Group PLC, JD Sports Fashion Group PLC, Made.com Group PLC, Property Franchise Group PLC, Sanne Group PLC, Smart Metering Systems PLC, Staffline, STM Group PLC, TP Group PLC. VR Education Holdings PLC

Trading announcements: Chemring Group, Ocado Group PLC

Economic data: UK unemployment rate, US inflation rate

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