A promising start to the summer coupled with the ‘royal wedding effect’ helped UK retail sales bounce back in May after a turgid start to the year. But swallow does not make a summer, and it will need several more months of positive growth to convince us that the retail sector is back. All this makes Harriet Russell’s Sector Focus this week on whether retail has finally hit rock bottom particularly well timed.
Elsewhere in retail this week we saw trading figures from a couple of higher end operators. Ted Baker has proven over the years to be a quality outfit but a slight weakness in high street retail sales sent some investors scurrying for the hills this week. Meanwhile, posh handbag maker Mulberry has seen a slowdown in its domestic market.
The housing market occupies even more column inches than the retail market and the current sense of a stalling market was further emphasised this week when Crest Nicholson shares fell after it reported weaker margins and issues shifting stock at the higher end of the market. In contrast Bellway, which operates lower down the value scale and has more regional exposure showed no such problems in its results and reiterated its aim to build a record 10,000 houses this year.
In other companies news this week we saw three companies suffer due to wildly differing, but potentially equally troublesome problems. Dixons Carphone hit the skids after admitting that credit card details of potentially millions of customers may have been compromised in a data breach, Rolls Royce ran into further potential problems with its Trent 1000 engines and XLMedia was hit by regulatory concerns.