(MENAFN- ProactiveInvestors) Retail sales growth accelerated at its fastest pace for almost 26 years according to the CBI’s latest monthly figures covering the crucial run-up to Christmas.
The survey of 122 firms covers the fortnight ending December 11 and includes the sales-boosting effects of Black Friday.
Black Friday price-cuts were embraced more widely by more UK retailers than ever before and discounting played an important part in helping sales encouraging more customers into stores and online to buy more widely.
"The strongest sales growth for a quarter of a century is a big boost for retailers as they head towards the climax of the crucial pre-Christmas trading period" said Barry Williams CBI Distributive Trades Survey chairman.
The figures didn’t stop Jefferies downgrading Next. The brokerage reckons its online competitive advantage may be diminishing somewhat.
At the same time it upgraded once the sector basket case.
It makes some very interesting points about the landscape of the industry saying successful operators now have multiple channels to market: bricks and mortar online deliveries and click and collect.
It points out that simply having a web presence just doesn’t cut it anymore and the traditional skills of good shop-keeping count for a great deal – even in this era of electronic commerce.
Underlining this point are the respective performances of Primark (owned by () and (LON:) the online fashion group.
The former is the sector’s best performer despite having no online presence while the latter is the worst.
While Jefferies has carried out a comprehensive survey of shopping trends it has chosen to focus primarily on just three stocks: Next () () and ().
For Next Jefferies is predicting a slowdown in sales growth and a contraction of profit margins so has downgraded its recommendation to ‘hold’ from ‘buy’ while crimping its price target to £60 a share.
meanwhile ‘fared reasonably well’ in the Jefferies survey of retailers’ services with a significant improvement in its deliver and click and collect options.
Financially things are improving too it said with gross margins on the up and online costs heading in the opposite direction.
Upgrading to ‘buy’ Jefferies reckons Debs is worth 85p a share.
Finally remains a ‘buy’ although the price target has been tickled a little higher to 550p a share.
“M&S fared poorly in our July survey despite a net 29% of consumers saying they liked the new website” Jefferies said.
“Some execution issues are likely to persist (such as delivery delays following Black Friday) but we see grounds for optimism now that the tablet mobile website has been relaunched and M&S has significantly improved its delivery offer.”
++ Elsewhere in the sector has downgraded grocer to ‘equal weight’ from ‘overweight’.
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