Health of the UK high street eyed on Friday with January retail sales scheduled

By Jon Hopkins / February 15, 2018 / www.proactiveinvestors.co.uk / Article Link

The health of the high street will be the main focus on Friday, with official UK retail sales data due for release at the end of a week that saw UK inflation remain stubbornly higher.

On Tuesday, the Office for National Statistics reported that the consumer price index in January remained at 3.0%, stalling at December's level after a slip back from 3.1% in November.

But with inflation expected to fall back as the year progresses, this should lead to an increase in real wages which in turn should help consumer sentiment and boost retail sales over 2018.

Figures from the British Retail Consortium (BRC) at the start of the month showed like-for-like retail sales rose 0.6% in January, compared with a fall of 0.6% for the same month in 2017.

The BRC said total sales rose by 1.4% last month, after a rise of just 0.1$ a year ago despite continuing tough trading conditions for retailers.

Helen Dickinson, BRC chief executive, said: "Against this challenging backdrop, 2018 didn't have a bad start during what is traditionally a lean month, with sales creeping up in line with the year's average."

Warehousing boost for Segro

On the corporate front, SEGRO PLC (LON:SGRO), the FTSE 100-listed real estate developer focused on warehousing and light industrial property will report its full-year results on Friday.

In a preview, Graham Spooner, investment research analyst at The Share Centre said: "The property developer has benefited from the growth of online retailing and the subsequent increased demand for warehousing."

He added: "In its third quarter update in October the company said demand for prime warehouse assets, especially related to ecommerce, remained strong. Investors will be looking for information on how rents are performing as well as any change in the vacancy rate.

"Also, an update on how the APP cargo assets at Heathrow, acquired last year, are performing."

Spooner noted that Segro's shares have had a good run over the past year, taking them close to the 600p mark last seen in 2008.

Significant events expected on Friday February 16:

Finals: Segro PLC (LON:SGRO), BGEO Group PLC (LON:BGEO)

Economic data: UK retail sales; US housing starts; University of Michigan consumer sentiment

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