Investors were treated to updates from both ends of the covid-19 retail sector spectrum on Thursday.
With those fortunate enough to remain employed over the last year having little else to spend their money on, Christmas shoppers went big on food, leading Tesco’s (LON:TSCO) UK like-for-like sales 8.1% higher during the 6 weeks covering the holiday period. For the wider 19-week reporting period, meanwhile, Tesco’s like-for-likes rose 6.1% in the UK and Ireland, and 5.6% overall.
The one real knock against Tesco on Thursday was that it has revised its covid-cost estimates, from £725 million to £810 million in light of the country’s 3rd lockdown.
Investors appeared more concerned with rising costs than record sales, leaving Britain’s biggest supermarket down 2%.
If Tesco is a pandemic best-case scenario, then Associated British Foods (LON:ABF) is illustrative of the high street carnage caused by covid. The Primark owner has said that if its flagship brand remains closed until February 27th – its financial half year – then it will lose £1.05 billion. That would mean it would just about break even in terms of adjusted first half operating profit, a rather notable turnaround from last (half) year’s £441 million.
However, better than expected performances across its variety of food sectors alleviated some of the 30% fall in retail revenue, helping the stock actually rise 0.7% after the bell.
Neither of these updates did too much for the FTSE, which edged 0.2% higher to tickle 6,770.
To be fair to the UK index, there wasn’t a lot going on elsewhere. The DAX sat 5 points off 14,000 following a 0.3% increase, while the CAC climbed 0.1% to 5,670.
Though the uncertainty surrounding Donald Trump – who just became the first President in history to be impeached twice – remains, the prospect of Joe Biden’s covid-19 stimulus plan started to warm up the Dow Jones futures. The incoming President is set to reveal his package this Thursday, setting the Dow up for a 110-point, record high-teasing rise.
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