The FTSE 100 dipped on Friday after the Office of National Statistics (ONS) announced a 1.4% fall in retail sales over March, marking a heavy drop from its 0.5% decline in February.
Retail shares are anticipated to plummet further, as consumers go so far as to cut down on typically essential expenses such as food and fuel.
The ONS highlighted a 1.1% fall in food sales, representing the sixth consecutive month of decline since November 2021.
Petrol and diesel sales also took a hit of 3.8%, indicating that people were spending less on non-essential car travel as the price of fuel continued to climb to record highs.
“When energy bills are shooting up, it costs considerably more to fill up your car with petrol and buying essentials like a loaf of bread and a pint of milk has become more expensive, it’s no wonder that retail sales have plunged,” said AJ Bell investment director Russ Mould.
“The gloomy outlook for UK retail caps off a frustrating post-Easter four-day session for equities, with the FTSE 100 slipping 0.3% on Friday which means it has essentially made no progress on the week.”
The Berkeley Group gained 2.4% to 41,730p after Jefferies raised the company to a ‘buy’ rating from ‘hold’ with a price target up to 5,587p from 4,703p.
B&M shares tumbled 5.9% to 517.5p on the announcement of CEO Simon Arora’s resignation after 17 years in the role.
“One might have thought cash-strapped consumers looking to save money would trade down to cheaper items which would benefit value retailer B&M, but the stock market clearly disagrees,” said Russ Mould.
“[Arora] has run the business for the past 17 years and made it one of the biggest modern success stories in UK retail.”
“The 5% share price decline on news of his forthcoming departure goes to show that the market doesn’t want him to go, although one must also factor in the latest retail sales figures as weighing further on the share price.”
Anglo American shares took a dip of 3.2% to 35,605p after RBC cut the group to ‘sector perform’ from ‘outperform’ and cut its price target to 3,400p from 4,300p.
The move follows the company’s disappointing 10% decline in output over its first quarter due to high rainfall levels across several of its projects and Covid-19-related absences impacting its mining operations.
