Buy these stocks to profit from the Christmas shopping rush

DIY investors can ride the retail rush this winter even as supply chain disruptions cast a shadow over the high street, according to stock market experts.

Britain is spearheading a revival in high-street shopping across Europe, according to the British Retail Consortium, a trade body. While the number of shoppers is still down on pre-pandemic levels, it showed signs of improvement from September to October. The UK was “leading the way among the major European economies”, the BRC added.

While supply chain disruptions may impact how much stores can sell, it could also hand retailers pricing power, said Paul Martin of consulting group KPMG. “We are unlikely to see any big discounting this Christmas,” he said. “Many retailers will be hoping consumers are willing to buy the most sought-after gifts at any price.”

Garry White, of wealth manager Charles Stanley, said DIY investors looking to profit from the Christmas shopping rush should buy shares in retailers that had already demonstrated they were able to ride out supply disruptions. He tipped Next, saying the clothing retailer was “very good at keeping investors’ expectations reasonable and then outperforming”, and supermarket Tesco.

Alex Savvides, a fund manager at J O Hambro Capital Management, said the outlook for Tesco was the best it had been for a number of years. “We expect the company to perform well as the powerful combination of a strong market position combines with elevated demand, competitor pressures and rising food inflation,” he said.

Chris St John, of fund group Axa, tipped Pets at Home as a good stock for the festive period. “Pets at Home is a market leader and has good levels of stock to support it, so it should trade well over Christmas,” he said.

Clothing retailer Next has proved resilient in the face of supply chain issues