Tesco drifts ahead of Wednesday’s figures

In an ominous move, ahead of Tesco’s figures later in the week, HSBC has downgraded its rating of the company to underweight.

Hot on the heels of last week’s Black Friday, we are currently enjoying Cyber Monday. Until a few years ago, this was not a particularly auspicious day in the diary. However, it has now assumed an important role in helping to assess and predict the retail markets’ online sales ahead of year-end. Visa is expecting UK shoppers to spend over £5000 per second today, an increase of around 16% from last year. Although today’s sales are a close reflection of the broader festive holiday sales, and therefore have a large weighting of electrical goods, the figures do highlight the shifting demographics of the underlying UK retail market.

Tesco offers a decent online sales platform, and certainly in comparison to some of the other top-four food retailers it is excellent. However, its in-store sales have failed to impress. The fact that, several days before the release of figures, HSBC feels compelled to state that the firm appears weaker than it was in 2012, and that efforts to refocus on the home UK market have so far been unsuccessful, does not bode well for Wednesday’s release.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.