- FTSE 100 loses ground as retail sales slow to lowest rate since 2022
- Apple fined £1.5bn for anti-competitive practices in streaming services
- London estate agent Foxtons sees profits drop by a third
- Oil prices falls as demand concerns outweigh supply cuts
- Greggs market share at an all-time high
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown:
“The wet February has certainly rained on retail’s parade. UK retail sales and consumer spending have increased at their slowest rate since 2022. Total retail sales managed to rise just 1.1% last month, at an annual rate. The pain felt by non-food volumes continues, as consumers continue to prioritise the essentials. The data by KPMG and the BRC also showed that Valentine’s Day wasn’t enough of an incentive to lift shopper’s spirits. While volumes at food stores are painting a better story, the path to improved profits isn’t a given, as lower price inflation takes the wind out of sails.
European regulators have fined Apple over £1.5bn in what is a landmark victory for Spotify. The huge fine represents punishment for Apple’s squeezing of competition from its streaming rivals. Rules in the App Store stopped promotions on the prices of rival services, leading to the very expensive slap on the wrist. In reality, the fine will be absorbed by Apple’s enormous resources fairly easily. The real questions will centre on what this means for Apple’s ability to protect market share in this corner of its Services business. Subscription based and software revenues are the answer to Apple’s long-term margin aspirations, and as such are watched closely by the market.
Major London estate agent, Foxtons, has reported a 34% drop in pre-tax profit amid a significantly more challenging sales environment. The group’s also been spending big on increasing staff numbers as it looks to refill the top of the sales funnel. There are some green shoots, with lower mortgage rates meaning there was a 31% year-on-year increase in the value of the under-offer pipeline. Estate agents will always feel the pain at times of economic stress, but Foxton’s market share means it’s in a better position than some in the short-term.
Brent crude has fallen for a second straight session, with the price of a barrel hovering at just over $82 a barrel. Demand questions are outweighing extended OPEC+ supply cuts, this is despite new Chinese economic growth targets of 5%.”
Matt Britzman, equity analyst, Hargreaves Lansdown:
“Greggs continues to show why it’s the UK’s leading food-to-go brand (YouGov’s Brand Index). This is a business intent on growing, aiming to surpass 3,000 UK shops while enhancing its multi-channel approach for better service. Digital channels are booming, with delivery sales up 23.6% last year following partnerships with Just Eat and Uber Eats. Greggs is extending hours to capture more of the evening market and bolstering its brand to both deepen loyalty and attract new customers.
Greggs is far more than just a treat, and its value offering puts it in a sweet spot with consumers still battling higher living costs. Maintaining that price point is key, and with cost inflation easing Greggs is making sure customers feel the benefit too. That’s likely to be a small drag on sales growth this year compared to last, but there are plenty of other growth avenues to target.
Investors don’t have to sit and wait while the growth strategy plays out. Greggs already boast a modest 2.6% forward yield and today’s special dividend is further evidence that the board’s keen to pay investors while it expands.”
