(Alliance News) - The Omicron variant dented the UK retail sector in December, data on Friday showed, but sales remain resiliently above pre-virus levels.
UK retail sales fell 3.7% in December month-on-month - the largest monthly fall since January 2021 - with the decline driven by non-food store sales which fell 7.1%. Retailers reported that Omicron hit footfall last month.
Automotive fuel sales volumes fell by 4.7% as work from home guidance led to reduced travel.
Still, UK retail sales remained 2.6% above pre-virus levels despite December's wobble.
"After strong pre-Christmas trading in November, retail sales fell across the board in December, with feedback from retailers suggesting Omicron impacted on footfall," said Heather Bovill, ONS deputy director for Surveys & Economic Indicators.
"As Plan B restrictions in England meant more people working from home, there was a notable fall for fuel sales. However, despite the fall in December, retail sales are still stronger than before the pandemic."
Pantheon Macroeconomics said December's retail sales decline is unlikely to stop the Bank of England raising interest rates next month.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 83.36 points, or 1.1%, at 7,501.65
----------
Hang Seng: closed down 0.1% at 24,917.03
Nikkei 225: closed down 0.9% at 27,522.26
S&P/ASX 200: closed down 2.3% at 7,175.80
----------
DJIA: closed down 313.26 points, or 0.9%, at 34,715.39
S&P 500: closed down 50.03 points, or 1.1%, at 4,482.73
Nasdaq Composite: closed down 186.23 points, or 1.3%, at 14,154.02
----------
EUR: down at USD1.1331 (USD1.1359)
GBP: down at USD1.3575 (USD1.3657)
USD: down at JPY113.86 (JPY114.00)
Gold: down at USD1,838.47 per ounce (USD1,845.00)
Oil (Brent): down at USD87.40 a barrel (USD88.67)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Friday's key economic events still to come
16:00 CET EU FCCI flash consumer confidence indicator
11:00 GMT Ireland WPI
----------
Japan's core consumer prices edged up year-on-year in December for the fourth month running, buoyed partly by higher energy prices, government data showed Friday. The core consumer price index, which excludes volatile fresh food prices but includes fuel costs, was up 0.5% in December, following similar rises from September to November. The advance follows 18 months of declines or stagnation during the depths of the pandemic, but fell slightly short of economist expectations for a 0.6% rise. And excluding fuel costs, prices were down 0.7% from a year earlier, according to the figures from the internal affairs ministry. For the whole of 2021, consumer prices were down 0.2%.
----------
The White House launched a charm offensive, complete with a Tom Hanks video, to mark US President Joe Biden's first year in the position on Thursday, but dire new polls and a major congressional setback told another story. Biden, who was sworn in to replace Donald Trump at noon last January 20, marked the day by meeting with top cabinet members in charge of rolling out his signature infrastructure spending plan, a USD1.2 trillion splurge he got passed in November with rare bipartisan support. "Our nation has never fully made this kind of investment," Biden said, celebrating one of his biggest wins of last year – and a project that should keep delivering good news as bridges, roads and other large public works roll out. The previous evening, the 79-year-old Democrat held an epic press conference lasting an hour and 52 minutes, longer even than the famously rambling events Trump used to stage.
----------
BROKER RATING CHANGES
----------
BERENBERG RAISES RENTOKIL INITIAL TO 'BUY' (HOLD) - PRICE TARGET 640 (510) PENCE
----------
CITIGROUP CUTS COMPUTACENTER TO 'NEUTRAL' (BUY) - PRICE TARGET 2675 (3260) PENCE
----------
COMPANIES - FTSE 250
----------
Promotional merchandise marketer 4imprint Group said revenue in its 2021 financial year was USD787 million, up 41% on the year before. Pretax profit is to be towards the top end of analyst forecasts, it added. "Even as challenges remain regarding the supply chain, inflationary pressures and the lingering effects of the pandemic, our performance in 2021 further demonstrates the flexibility and resilience of our business model," said 4imprint.
----------
Close Brothers said it expects a "solid" first half performance even as trading income at Winterflood "moderated". In Banking, the loan book increased to GBP8.69 billion at January 31 from GBP8.44 billion at the end of July. CBAM continued to deliver good growth in the period, achieving annualised net inflows of 8%. "As highlighted in the Q1 2022 trading update, Winterflood's trading performance has moderated since the end of the 2021 financial year. As a result, operating profit in the period is broadly in line with the H1 2020 run rate," the merchant bank said.
----------
London- and Johannesburg-listed Ninety One reported assets under management of GBP141.7 billion at the end of 2021, up on both GBP140.0 billion at the end of September and GBP128.6 billion at the end of 2020.
----------
COMPANIES - SMALL CAP
----------
Restaurant Group said it now expects full-year profit at the top end of forecasts. In previous guidance, the Wagamama dining chain owner said it expects adjusted earnings before interest, tax, depreciation and amortisation in a range of GBP73 million to GBP79 million and year-end net debt less than GBP190 million. Following cost control and continued strong trading, it now expects earnings at the top of the forecast range and net debt less than GBP180 million. The brighter outlook comes despite the UK government's 'Plan B' coronavirus restrictions introduced in December to stem the spread of the Omicron variant. "Whilst we are encouraged with the recent government announcement that all "Plan B" restrictions will be lifted next week, we expect consumer confidence may take longer to recover. We are also mindful that the recovery in air passenger volumes remains dependant on the timing of changes to both UK and International restrictions," said Restaurant Group.
----------
Advertising agency M&C Saatchi said the UK Financial Conduct Authority is closing an investigation into the company and no enforcement action will be taken. The company added that it now expects headline pretax profit in 2021 to be "materially ahead" of previous expectations. "Momentum has continued into the start of 2022 with major client wins," it said.
----------
COMPANIES - GLOBAL
----------
Netflix late Thursday hailed content like Squid Game for aiding the streaming services platform's popularity, though rising competition and slowing subscriber growth took the gloss off a strong end to 2021. For the three months to December 31, revenue rose to USD7.71 billion from USD6.64 billion in the fourth quarter of 2020. Fourth quarter net income was USD607 million, or USD1.33 per diluted share, rising from USD542 million, or USD1.19 diluted earnings per share, the year before. Looking ahead, Netflix said for the first quarter of 2022, it expects to add 2.5 million subscribers, down from the 3.98 million it added at the same time in 2021. Netflix pointed to increased competition from other companies, such as Walt Disney and Apple, as a reason for the slowdown as it battles for market share.
----------
Peloton Interactive's shares tumbled before trading was halted Thursday, after a report the fitness firm planned to suspend production of bikes and treadmills due to falling consumer demand. Volatile trading struck the company's share following a CNBC report, which cited internal documents and said Peloton would pause the making of its Bike product for two months. The firm had already halted its more expensive Bike+ in December, and will do so until June, while treadmill production is to stop for six weeks from next month, the report said. The stock was interrupted four times on New York's Nasdaq, the last time around 1810 GMT, when the share lost more than 20% to about USD25.
----------
Alphabet's Google on Thursday appealed an EU court decision to uphold the bloc's EUR2.4 billion fine for abusing its search engine dominance. The tech giant said it would go to the European Court of Justice, the EU's highest court, after the General Court confirmed in November a decision by the European Commission in 2017. At the time, the fine was the EU's biggest ever. But it was later exceeded by a EUR4.3 billion fine against Google over its Android smartphone operating system. "After careful consideration, we have decided to appeal the General Court's decision because we feel there are areas that require legal clarification from the European Court of Justice," a short statement by the company said. The case centres on Google's shopping service and is one of three against the search engine giant currently moving through the EU's drawn-out appeals system.
----------
Friday's shareholder meetings
Character Group PLC - AGM
Craven House Capital PLC - AGM
----------
By Lucy Heming; lucyheming@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.