Market report

Festive boost for Tesco, M&S | Persimmon sales fall


4.30pm: London edging towards record high

The FTSE 100‘s strong start to the year pushed the index closer to the 8,000 threshold, closing 69.06 points higher at 7,794.04.

Tesco and M&S


Tesco and Marks & Spencer enjoyed a festive boost as shoppers chose to splash the cash in spite of the cost of living squeeze, although price inflation was a contributory factor in the higher figures.

The UK’s biggest retailer, Tesco, said like-for-like sales rose 4.3% in its third quarter to 26 November and were up 7.2% in the six weeks to 7 January.

The company maintained its forecast for 2022-23 retail adjusted operating profit of between £2.4 billion and £2.5 billion, down from the £2.65 billion in 2021-22.

“We go into the new calendar year with good momentum and I am confident we can continue to maintain our competitiveness and deliver a strong performance relative to the market despite the challenging conditions ahead,” said chief executive Ken Murphy.

Marks & Spencer said its like for like food sales were up by 6.3% on the same basis over the 13 weeks to 31 December, delivering its best ever market share, and an 8.6% rise in clothing and home sales.

Chief executive Stuart Machin said M&S outperformed the market in food in both volume and value in the four-week Christmas period for the second year running, whilst it maintained market leadership in clothing and home with its highest share in seven years.

“This performance across both our businesses provides confidence in delivering our full-year results.”


Persimmon homes

House builder Persimmon said forward sales had fallen by more than a third as customers deferred major purchase decisions amid the cost-of-living crisis, and warned the weaker economy would have an adverse impact on the outlook for 2023.

It said higher mortgage rates, inflation, heightened market uncertainty and the end of reservations under the controversial government ‘Help to Buy’ scheme, hit private sales rates in the fourth quarter and forward sales were now down 36% to £1bn.

“While we are promoting initiatives to stimulate demand, including the recent launch of our ‘10 months mortgage free’ customer offer, which generated a strong increase in website enquiries in its first week, it is too early to predict when there will be a recovery in demand,” it said in a trading statement.


Energy services company Wood said it anticipates “a material improvement in underlying operating cash flows in 2023 which will be outweighed in the short term by defined payments on legacy liabilities, before a return to positive free cash flow in 2024.”

Ken Gilmartin, CEO, said: “We are pleased to have delivered a result for 2022 in line with our expectations at the half year, including a return to revenue growth and a balance sheet position that reflects the strengthened group.

“We are focused on growth in energy and materials, both with structural growth drivers – energy security, energy transition, net zero and the circular economy – which create long term growth opportunities for Wood. Our leading positions in these markets, long-term client relationships and expertise in decarbonisation and digitalisation is enabling us to win additional market share.

“Significant contracts won in the second half of the year include a five-year engineering services contract renewal with bp, a three-year contract renewal with Shell in the UK North Sea, and a four-year contract with INEOS to deliver a state-of-the-art petrochemicals complex in Belgium.

“This is a new Wood, led by a new team, and the strategy we recently shared at our Capital Markets Day will enable us to deliver sustainable returns. We have attractive growth prospects in our core markets, we are trusted by our clients, and we have the talent and solutions to enable a net-zero future. We’re focused on designing a strong future for Wood and enter this New Year with positive momentum.”


Online fashion retailer ASOS posted a 3% fall in revenue over the four months to the end of December, hit by weaker demand and delivery disruption in the UK, its biggest market, and making it one of the laggards in the sector.

Rival retailers with physical shops such as Next outperformed ASOS in the period as consumers prioritised festive spending and chose to visit stores amid concern over delivery issues.


Premier Inn owner Whitbread posted a jump in third-quarter sales as it highlighted a strong performance in the UK and further progress in Germany.

In the 13 weeks to 1 December, total sales rose 22.9% from the same period a year earlier, with sales in the UK and Germany up 19.2% and 158%, respectively.

In the UK, accommodation sales pushed up 23.8%, driven by a combination of increased occupancy, higher average room rate and estate growth, with a strong performance across both London and the regions. Meanwhile, food and drink sales were ahead 8.4%.

Mitchells & Butlers

Pub chain Mitchells & Butlers said like-for-like sales in the year to date increased 10.4%, with total sales growth of 13.3%.

Compared to the same period in FY 2019, the last full financial year before Covid-19, like-for like sales were up 8.9% over the first 15 weeks to 12 January 2019, with 9.2% growth in the first ten weeks followed by 8.5% growth in the last five weeks, despite key recent weeks being negatively impacted by industrial action.


Cycle and car components chain Halfords has adjusted its full-year profit outlook despite posting strong revenue growth over Christmas. 

Halfords warned its annual profits could drop from between £5m and £15m despite posting 38.3% group revenue growth over the third quarter. 


Real estate agent Savills said its full-year performance was ahead of expectations despite a difficult backdrop to trading.

The company said it performed ahead of its previous expectations and “substantially” ahead of the 2019 pre-Covid comparative period.

It pointed to the relative strength of the prime residential market, which it said had continued stronger for longer than it originally expected and helped to mitigate volume declines in commercial transaction activity.

However, it expects the “abnormally high” UK transaction volumes of the post-lockdown market to reverse this year as the market normalises to the prevailing economic environment. This is likely to be particularly notable in markets outside London, it said.

“In the year ahead, challenging macro conditions are expected to continue with inflation and interest rates remaining in focus for some time,” Savills said.

“As a result, the speed at which individual investment markets recalibrate to the current/anticipated cost of debt is unclear although we expect portfolio valuations to continue to mark to market through at least the first and second quarters of 2023.

“On the positive side, certain markets, such as the UK, are recalibrating faster than in the past, and will be helped by the lack of development supply and an overall trend to sustainability.”


British Gas parent Centrica said Russell O’Brien will be appointed group chief financial officer (CFO) and an executive director on 1 March.

Kate Ringrose is expected to leave Centrica towards the end of 2023 after an orderly transition.

Global markets

Oil prices edged up early today, building on gains in the previous session as China’s demand outlook improved, though gains were limited ahead of upcoming inflation data from the United States.

Brent crude had risen 16 cents, or 0.2%, to $82.83 per barrel by 0442 GMT, while US West Texas Intermediate crude also rose 13 cents, or 0.2%, to $77.54 per barrel – Reuters.

Wall Street stocks ended the session in positive territory as major indices managed to build on what has been a strong start to 2023.

At the close, the Dow Jones Industrial Average was up 0.80%, while the S&P 500 advanced 1.28% and the Nasdaq Composite saw out the session 1.76% firmer.

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