"We are taking a more cautious view on the UK consumer. The end of 2024 and early 2025 are likely to have been the sweet spot with real wage growth set to slow and fear of unemployment set to build from here. Our Household Cash Flow model shows discretionary spending lagging spending power and, unless consumers reduce savings, there will be a 4ppt slowdown in discretionary spend to +3% in 2H from +7% in 1H."
"Associated British Foods, which owns Primark as well as a range of other food and drink brands such as Twinings, has fallen by 5% this morning, after analysts at the bank downgraded their view on the stock from a neutral hold to sell. Deutsche also downgraded its view on home improvement retailer Wickes to a sell, with its shares falling by as much as 9% this morning, making it the worst laggard in the mid-cap FTSE 250 index today."
Deutsche Bank downgraded several UK retail stocks and lowered target prices, triggering broad selling in the sector. Associated British Foods fell about 5% after its rating was cut from neutral to sell. Wickes shares dropped as much as 9% following a downgrade to sell, making it the worst performer in the FTSE 250 mid-cap index. Kingfisher was downgraded from buy to hold, with shares down about 4%. Household cash flow analysis projects discretionary spending slowing from +7% in 1H to +3% in 2H unless consumers reduce savings. Dunelm and Marks & Spencer had target prices lowered but retained buy ratings.
Read at www.theguardian.com
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