Section 1.0. UK Retail Sector Landscape, Trends & SWOT Analysis

As per the Confederation of British Industry, British retail sales rebounded in October despite the downbeat consumer confidence. Also, the festive spending for Christmas can propel the growth for the retail sector. However, soaring energy prices and cost-of-living crisis can also keep the short-term outlook uncertain. 

As retailers are looking beyond the challenges faced in the past two years, it is imperative to capitalize on emerging consumer behavior and advancing shopping experience through technology, innovation, and new business models. The UK Retail sector include players from various industries, such as entertainment, fashion, food, general merchandise, health & beauty, home, sports & leisure, and technology.

As per the Department of International Trade, the UK is pioneering in e-commerce and retail technology as more than £92 billion was generated through online sales in 2021, which is highest in Europe. The Government is actively supporting the UK-based Companies to expand into emerging markets.

Section 1.1. Trends in the Retail Sector

Section 1.2. SWOT Analysis

Section 2.0. Sector Risks & Opportunities

Section 2.1. Risk Exposures to Retail Sector

Section 2.2. Retail Sector Outlook

According to the latest figures from the Office for National Statistics (ONS), the UK retail sales volume fell by 1.6% month-on-month in August 2022, as rising prices and cost of living crisis affected the sales volumes. However, the UK unemployment rate has plunged to 3.6% in the three months to July 2022, while British consumer price inflation fell for the first time in almost a year in August 2022. Both these macroeconomic factors can provide some near-term relief.

Going forward, retailers should take advantage of increasing online penetration and smartly leverage a mix of physical and digital touchpoints to induce customers to make purchase.

Section 3.0. Watches of Switzerland Group PLC (Buy at GBX 915.00, closing price as of 8 November 2022)

3.1 Company Details

3.2. Key Metrics in Pictures

3.3 Valuation and Technical Guidance

(Source: REFINITIV, Analysis by Kalkine Group)

Section 4.0: Cake Box Holdings PLC (Speculative Buy at GBX 108.00, closing price as on 8 November 2022)

4.1 Company Details

4.2. Key Metrics in Pictures

4.3 Valuation and Technical Guidance

(Source: REFINITIV, Analysis by Kalkine Group)

Please note markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 8 November 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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