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April 24, 2020, 10:32 a.m. EDT

U.K retail sales plunged in March, but just wait until April

FTSE 100 heads for a slightly positive end to the week

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By Barbara Kollmeyer, MarketWatch


Getty Images
A member of the public walks her dogs down an empty high street in the city centre on April 02, 2020 in Exeter, England.

The U.K. suffered its biggest monthly retail sales drop on record in data published Friday, but next month could be far worse, warned analysts at Investec.

Over the month of March as the coronavirus was spreading through Europe, the U.K. high streets suffered a 5.1% drop in sales, the biggest since the series began in 1996, the Office for National Statistics said. The only sectors to see growth were food stores and non-store retailing, while online sales as a proportion of all retailing hit a record high of 22.3%.

“It is worth noting that today’s figures cover 1 March to 4 April, meaning that only two weeks of the five-week period was affected by the social distancing measures,” said George Brown, analyst at Investec in a note to clients.

“The next release, spanning the four weeks up to 2 May, will consequently be even uglier as the lockdown will have been in place for the full period,” said Brown. And supermarkets probably will have found it tough to keep up those record paces of sales growth due to purchasing limits and stockpiling of toilet paper and pasta.

Apart from a 1% gain for J. Sainsbury PLC /zigman2/quotes/206038250/delayed UK:SBRY -2.40% , retailers were among decliners in London, with the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.34%  falling 0.8% to 5,778, and with the week set to deliver a 0.2% drop. Shares of Wm Morrison Supermarkets PLC /zigman2/quotes/205533138/delayed UK:MRW -0.66%  fell over 1%, while clothing retailer Next PLC /zigman2/quotes/200704121/delayed UK:NXT -1.33%  dropped over 2%.

Shares of Burberry /zigman2/quotes/205386705/delayed UK:BRBY +0.75%  fell 3%. The company said on Friday that board directors and senior management would take voluntary pay cuts to help the company preserve liquidity amid the coronavirus crisis. The company said it has turned its northern England trench coat factory into a manufacturing site to produce personal protection equipment for medical and care workers fighting the virus.

Also weighing on the FTSE 100 was a report suggesting that Gilead’s /zigman2/quotes/210293917/composite GILD 0.00%  hoped-for coronavirus treatment remdesivir wasn’t effective in early China trials. The company countered that the results weren’t conclusive, with its own clinical trial due for release at the end of the month.

/zigman2/quotes/206038250/delayed
UK : U.K.: London
197.25 p
-4.85 -2.40%
Volume: 7.29M
Sept. 25, 2020 4:35p
P/E Ratio
33.83
Dividend Yield
1.67%
Market Cap
£4.48 billion
Rev. per Employee
N/A
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
5,842.67
+19.89 +0.34%
Volume: 699,068
Sept. 25, 2020 4:57p
loading...
/zigman2/quotes/205533138/delayed
UK : U.K.: London
173.15 p
-1.15 -0.66%
Volume: 7.46M
Sept. 25, 2020 4:35p
P/E Ratio
15.91
Dividend Yield
3.97%
Market Cap
£4.18 billion
Rev. per Employee
N/A
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/zigman2/quotes/200704121/delayed
UK : U.K.: London
5,934.00 p
-80.00 -1.33%
Volume: 278,651
Sept. 25, 2020 4:35p
P/E Ratio
23.14
Dividend Yield
0.00%
Market Cap
£7.67 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/205386705/delayed
UK : U.K.: London
1,544.50 p
+11.50 +0.75%
Volume: 764,946
Sept. 25, 2020 4:35p
P/E Ratio
52.62
Dividend Yield
0.73%
Market Cap
£6.19 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/210293917/composite
US : U.S.: Nasdaq
$ 62.25
0.00 0.00%
Volume: 7.14M
Sept. 25, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
4.37%
Market Cap
$78.04 billion
Rev. per Employee
$2.02M
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Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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