The Confederation of British Industry released its monthly retail sales report today with a boost for retail sales, highlighting an unexpected a rise. The gains of +29 are way ahead of the Reuters poll predictions which indicated a fall of +13, and have been heavily reflected in today’s FTSE index, with retailers storming ahead.
Retail giants are today’s biggest FTSE risers
Marks and Spencer’s PLC (LON:MKS) is enjoying massive gains in today’s index, having risen 1.66 per cent to 306.90 GBX (+5.00) since trading opened this morning. These gains come hot on the heels of Zack’s Investment Research upgrading the Marks and Spencer ‘sell’ rating to ‘Hold’ just 2 days ago and suggest a huge turn around for the company which earlier this year, was on the verge of dropping out of the FTSE 100 for the first time since shares were created in 1984.
Marks and Spencer’s are not the only retail risers today, Associated British Foods (LON:ABF) has also made significant gains, currently standing at 2,386.00 GBX +46.00 (1.97%).
Summer weather – a cautionary tale
The positive balance comes as a result of good weather with retailers spending predominantly on food and drink for barbeques and outdoor parties following a long spell of good weather. However, cautionary warnings were issued in the report.
The present rise in high street retail sales goes against the current trend in the index and has been predicted to fall over the coming months as rises in prices, falling employment and a lack of investment being cited as reasons for the obstacles the retail sector will face in the coming months. Anna Leach, CBI Head of Economic intelligence commented: “That said, the outlook for retail remains challenging……..The long-term challenges facing the retail sector are significant and won’t be resolved overnight.”