Grocers perk up as hopes grow of bumper takings

SUPERMARKET shares rallied as traders embraced the festive cheer and bet on a good Christmas for food sales.

Clive Black, an analyst at Shore Capital, said that all the big grocers will see a lift this year thanks to rising prices. Food inflation hit a four-year high of 3.6pc as Christmas approached, according to research firm Kantar Worldpanel.

This boosts the value of sales at stores and tends to help retailers’ profits. Black said: ‘All of the major British supermarket groups are expected by Shore Capital to report positive like-for-like sales for the festive period.’

German players Aldi and Lidl are likely to have been the best performers as they seek to appeal to a more sophisticated clientele.

‘The discounters will do well again this year, they will probably be considered winners once again,’ the analyst said, adding that the pair ‘are progressively shaking off their cheap and cheerful roots’.

But Black believed there would be good news for listed firms too. He sees Tesco as the stand- out player, saying it has set the pace this year and that is likely to be reflected in January’s round of trading updates.

Tesco announced its first dividend for three years in October, after first-half profits climbed to £562m from £71m a year earlier.

Boss Dave Lewis called it a ‘significant milestone’ at the time. Shares in Tesco rose 0.3pc, or 0.7p, to 208.4p yesterday.

Rivals are expected to do well too. Morrisons, which saw its latest half-year profits grow 39.9pc to £200m, was the best performer in the sector, up 1.2pc, or 2.6p, at 219.2p, while Sainsbury’s climbed 0.5pc, or 1.1p, to 241.9p. Black also tipped low-cost retailer B&M Bargains, which he said is likely to be an overall winner in the race for High Street custom due to its focus on value.

Since launching in Blackpool nearly 40 years ago, the chain has grown to have more than 540 stores and 24,500 staff.

Its profits for the most recent six months were up 17.8pc at £86.8m, and the dividend was hiked 26.3pc to 2.4p. Shares in the FTSE 250 firm are up more than 50pc this year, but yesterday fell 0.1pc, or 0.5p, to 414.5p.

Meanwhile, the FTSE 100 nearly flat-lined on Thursday but managed to eke out a new high in the UK’s last full trading day of 2017.

The index closed up merely 2.20 points to hit a high of 7622.88, edging above the 7620.68 record set on Wednesday. It marks the third such record in a week.

Its gains were helped by mining stocks which benefited from an improved copper price.

Rio Tinto led the pack, up 1.5pc, or 58.5p, at 3858p. Anglo American rose 0.9pc, or 13.5p, to 1537.5p,

Antofagasta gained 0.8pc, or 8p, to close at 992.5p, BHP Billiton climbed 0.9pc, or 13.5p, to 1499.5p, and Glencore was up 0.6pc, or 2.3p, at 385.45p.

At the smallest end of the market, AIM-listed prospecting business Patagonia Gold jumped 10pc, or 0.1p, to 1.1p after revealing a deal to buy a digging site in Argentina for £11.2m. Other movers included Advanced

Oncotherapy, which is developing a high-tech treatment for cancer.

It zaps tumours with highenergy protons and is considered to have fewer side- effects than normal radiotherapy. The procedure became famous in 2014 when five-year-old brain tumour victim Ashya King was spirited abroad for the treatment by his parents – against the will of the NHS.

A court eventually ruled Ashya should be allowed the treatment in Prague and he has since been able to return to school.

Advanced is developing a UK-system, which it expects to be operational in the last three months of 2018, and is building premises in London. Yesterday, its shares rose 5.9pc, or 3p, to 54p.