Next Bumps Outlook After Christmas Defies Gloom: The London Rush

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(Bloomberg) — High street bellwether Next Plc’s update this morning offers a window for those monitoring the wallets of the British consumer. Despite dire consumer confidence and falling retail sales, the company reported a better than expected Christmas trading period, prompting it to raise its profit outlook. Cautiously optimistic updates from value retailers B&M European Value Retail SA and Greggs Plc also add to the picture that perhaps shoppers are proving more resilient than some predicted. For more insight into that, we’ll have to wait for updates from the supermarkets next week.

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Here’s the key business news from London this morning:

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In the City

Next Plc: The retailer said full price sales over the Christmas period were up 4.8% compared to last year, beating previous guidance of a 2% decline.

B&M European Value Retail S.A.: The discount retailer reported what it described as a “very good performance” in the third quarter across all categories in the UK, with sales in key ranges supporting an improved gross margin.

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Greggs Plc: The bakery chain expects its results for this year to be in line with its previous expectations after seasonal favorites like the Festive Bake — and its vegan alternative — proved popular with customers.

In Westminster

Rishi Sunak’s first speech of the year “tried hard” to address both the concerns of his critics as well as his supporters — and ended up “pleasing nobody,” writes Bloomberg Opinion’s Therese Raphael. 

The UK is failing to do enough to improve energy efficiency, which is needed to curb struggling households’ soaring bills, a parliamentary committee found, urging ministers to prioritize upgrading Britain’s leaky housing. 

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Meanwhile, some of London’s biggest railway stations will be shut today while airports such as Gatwick are also deprived of any train services, as strikes on the network reach a critical peak.

In Case You Missed It 

Automakers had their worst year of UK sales in three decades, with only electric vehicles providing a bright spot.

Ryanair Holdings Plc raised its profit target for the year through March following stronger-than-expected demand during the Christmas travel period. Europe’s biggest discount airline said at the same time it expects to be loss-making in the fourth quarter and that it’s seen a “recent softening in UK outbound and Irish – Prov. UK traffic and pricing.”

Glencore Plc is facing new investor questions over the climate impact of its top performing coal mining unit, ratcheting up pressure on the world’s biggest shipper of the dirtiest fossil fuel.

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Finally, pubs and restaurants are cutting their opening hours as staff shortages, high energy costs and wider inflationary pressures take their toll, a British Chambers of Commerce survey showed.

Looking Ahead 

There are no major company updates scheduled for the first Friday of 2023, but investors will likely take a closer look at the final December figures of S&P Global’s survey of UK private sector purchasing managers. The preliminary composite PMI showed signs of resilience in December, suggesting that a recession may not be as deep as feared, according to Bloomberg Economics. 

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