Market report

Confidence rises, but John Lewis jobs at risk

John Lewis store in St James
John Lewis is considering job cuts (pic: Terry Murden)

Stocks jumped higher after a key consumer confidence index reached its highest level in two years.

London’s blue chip FTSE 100 closed 1.4%, or 105.36 points, higher at 7635.09. after the GfK index increased three points to -19 in January, with shoppers more optimistic about their personal finance situation.

GfK client strategy director Joe Staton said: “Despite the cost-of-living crisis still impacting many households across the UK, consumers appear to be encouraged by the positive news about falling inflation.

“On balance, while there is national and global turmoil, the Consumer Confidence Index has started 2024 on a positive note – let’s see if this optimism continues.”

Renewed consumer confidence may not save jobs at the John Lewis and Waitrose Partnership which could be about to axe 11,000 jobs in a five-year downsizing of the business that aims to restore profitability.

Concerns about jobs were raised after the retail group slashed redundancy terms this week. Sources said at least 10% of the staff-owned business’s 76,000-strong workforce could go across the group’s head office, supermarkets and department stores.

John Lewis warned about potential job cuts in March last year as part of a plan to reduce costs and use technology to improve efficiency. The group has already cut thousands of jobs and closed stores, including one in Aberdeen.

WH Smith posted a growth in sales in the 20 weeks to 26 January 2024 as it achieved its ”strongest-ever position as a global travel retailer.”

Retail, Multrees Walk
Shoppers are feeling more upbeat (pic: Terry Murden)

Total group revenue was up 8% on the prior year. Across its global travel divisions, it has seen continued momentum since the start of the financial year, resulting in a strong 20-week performance, up 16% on 2023 on a constant currency basis.

UK High Street division delivered a good performance, in line with expectations, with store like-for-like (LFL) revenue up 1% in December.

Leading the FTSE 100 risers were luxury goods companies as the feelgood factor made a rare impact on the market.

Diageo closed up 5.1%, or 139p, at 2849p while Burberry was 4.9% or 63p, higher at 1341.5p after LVMH reported sales growth in its fourth quarter.

Further encouragement came from the US where positive economic data has seen Wall Street stocks continue their upward march.

US gross domestic product grew at an annual rate of 3.3% in the last quarter of 2023, the Bureau of Economic Analysis said.

“Across the Atlantic, the US released its latest GDP update and the data was as good as it could possibly get,” noted Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The European Central Bank left its key interest rate at a record high on Thursday afternoon.

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