Tesco leads Big Four going into Christmas

In what analysts believed - and companies hoped - would turn out to be a repeat of last year's pattern consumers in the UK seemed to be saving until the last minute on spending on Christmas gifts, according to analysts at Jefferies.

In what analysts believed - and companies hoped - would turn out to be a repeat of last year's pattern consumers in the UK seemed to be saving until the last minute on spending on Christmas gifts, according to analysts at Jefferies.

Nevertheless, some retailers did better than others, although the next market update is expected to be particularly strong. Thus, discounters continued to grow share (given sales increasing by 14.3%). High-end operators also continued to outperform the Big Four.

Within the Big Four, food sales grew by 2.3%, versus 3.2% in October, while non-food sales dropped by 2.8% (compared to a three month average of 2.3%).

As regards Tesco specifically, Jefferies said that it was approaching Christmas with the strongest trading momentum of the Big 4 (Tesco, ASDA, Morrison and Sainsbury): "The UK market leader has outgrown its UK major peers by 200bps (the biggest rate of outperformance recorded in any 4-week period for six years). Cash sales growth of 2.7% splits into very strong food increases of 5.2% and another major non-food decline (this time -9%)."

Even more interestingly, the broker added that, "Tesco was certainly promotional in November (and also helped by a soft comparable), but we also believe improvements in the execution are starting to pay off".

Lastly, those analysts highlighted that Tesco's above-par performance seemed to be hurting Sainsbury, while Morrisons trading remained poor.

As of 15:43 shares of Tesco are rising by 1.36% to 326.85p.

AB

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Here’s why you really should own at least some bitcoin
Bitcoin

Here’s why you really should own at least some bitcoin

While bitcoin is having a quiet year – at least in relative terms – its potential to become the default cash system for the internet is undiminished, …
16 Sep 2020
Central banks want politicians to take charge – but what will they do?
US Economy

Central banks want politicians to take charge – but what will they do?

The US Federal Reserve has come to the end of the road in terms of what it can do to accelerate any recovery, says John Stepek. It's over to the polit…
17 Sep 2020
IAG's share price is ready for take-off - here's how to play it
Trading

IAG's share price is ready for take-off - here's how to play it

The owner of British Airways has had a turbulent year, but is now worth a punt. Matthew Partridge explains the best way to play it.
8 Sep 2020