The U.K. suffered its biggest monthly retail sales drop on record in data published Friday, but next month could be far worse, warned analysts at Investec.
Over the month of March as the coronavirus was spreading through Europe, the U.K. high streets suffered a 5.1% drop in sales, the biggest since the series began in 1996, the Office for National Statistics said. The only sectors to see growth were food stores and non-store retailing, while online sales as a proportion of all retailing hit a record high of 22.3%.
“It is worth noting that today’s figures cover 1 March to 4 April, meaning that only two weeks of the five-week period was affected by the social distancing measures,” said George Brown, analyst at Investec in a note to clients.
“The next release, spanning the four weeks up to 2 May, will consequently be even uglier as the lockdown will have been in place for the full period,” said Brown. And supermarkets probably will have found it tough to keep up those record paces of sales growth due to purchasing limits and stockpiling of toilet paper and pasta.
Apart from a 1% gain for J. Sainsbury PLC
SBRY,
retailers were among decliners in London, with the FTSE 100
UKX,
falling 0.8% to 5,778, and with the week set to deliver a 0.2% drop. Shares of Wm Morrison Supermarkets PLC
MRW,
fell over 1%, while clothing retailer Next PLC
NXT,
dropped over 2%.
Shares of Burberry
BRBY,
fell 3%. The company said on Friday that board directors and senior management would take voluntary pay cuts to help the company preserve liquidity amid the coronavirus crisis. The company said it has turned its northern England trench coat factory into a manufacturing site to produce personal protection equipment for medical and care workers fighting the virus.
Also weighing on the FTSE 100 was a report suggesting that Gilead’s
GILD,
hoped-for coronavirus treatment remdesivir wasn’t effective in early China trials. The company countered that the results weren’t conclusive, with its own clinical trial due for release at the end of the month.
Source : MTV
