UK plc has seen sales and profit suffer in the three months to June, weighed down by a “stuttering” supermarket sector, new research has found.
The latest Profit Watch UK report from retail broker The Share Centre took data from the UK’s largest 350 listed companies which reported annual results in the period.
It found that UK plc revenues fell by 2.2 per cent year on year to £341.7 billion in the quarter as supermarkets saw sales fall below £100 billion for the first time in six years.
Total operating profit also fell by 3 per cent to £27.1 billion, its eighth fall in nine quarters, with the report highlighting a drop in profitability at Sainsbury’s, Tesco, and Morrisons.
Helal Miah, investment research analyst at The Share Centre, flagged up “a tough couple of years for UK plc, battling against global economic headwinds”.
He added: “Supermarkets have had a particularly difficult time, facing intense price pressure and competition from discounters.” That said, there was cause for optimism with more than half of firms reporting growing sales, including stronger performances from industrials and general retailers.
The report also noted that 40 per cent of the UK’s 350 revenues are declared in US dollars, and Miah pointed out that the devaluation of the pound will boost the sterling value “of any overseas business”.
He also singled out defensive sectors like utilities and pharmaceuticals, saying they “are likely to be well insulated” on the back of factors such as “relatively steady” demand.