Among the major news in the UK, retail stocks were trending lower today after the June sales report revealed lower volumes due to the untimely cool weather. According to the Office for National Statistics, UK retail sales decreased by 1.2% in June, as compared to a 2.9% increase in May. The decline was much higher than the 0.4% fall expected by analysts.
The core retail sales, excluding auto motor fuel, fell by 1.5% month-on-month, compared to the previous increase of 2.9%.
The data reflects that UK shoppers remained hesitant to spend despite the decrease in inflation. Additionally, the cooler, wetter weather in spring and early summer, coupled with prolonged uncertainty before the general election, seems to have discouraged shoppers.
Retail Shares Tumble
Following the disappointing figures, retail stocks took a hit, with some of them featuring among the top fallers for the day. Shares of Luxury fashion house Burberry Group PLC (GB:BRBY) lost 6% of their value as of writing, while JD Sports Fashion (GB:JD) and Frasers Group (GB:FRAS) shares dropped by over 4% and 2%, respectively.
Today’s decline has added to the difficulties of Burberry shareholders, who are already facing a challenging period. Earlier this week, Burberry shares fell by around 16% after the company’s comparable store sales plunged by 21% year-over-year in the first quarter of FY25. The company cautioned that tougher trading would continue in July as well, and suspended the dividend payments for FY25.
Earlier in July, supermarket retail chain company J Sainsbury PLC (GB:SBRY) also emphasized unseasonal weather conditions in its Q1 trading update for FY24/25. Sainsbury’s overall retail sales were boosted by a 4.8% increase in grocery sales. However, sales of general merchandise and clothing fell by 4.3% due to weaker seasonal sales.
Is SBRY Stock a Buy?
According to TipRanks consensus, SBRY stock has received a Moderate Buy rating, backed by three Buys, two Holds, and one Sell recommendation from analysts. The Sainsbury’s share price target is 307.20p, which is 12.6% higher than the current trading level.
