London pre-open: Stocks seen lower as retail sales hit by wet weather

London stocks were set to fall at the open on Tuesday as investors mulled uninspiring retail sales data and a slew of corporate releases.

The FTSE 100 was called to open around 20 points lower.

Data out earlier showed that UK retail sales growth slowed last month as volumes were dampened by the wettest February on record.

According to the British Retail Consortium-KPMG Retail Sales Monitor, total sales rose 1.1% year-on-year in February, following 5.2% growth the year before. This was lower than the 1.2% growth seen in January and well below the 12-month average growth rate of 3.1%.

Food sales were up 6% year-on-year over the three months to February, under the 12-month average increase of 7.9%, but non-food sales dropped 2.5%, compared with the 12-month average decline of 0.9%.

"Not even Valentine’s Day lifted customers out of the gloom, and gifting products that typically sell well, like jewellery and watches, failed to deliver," said Helen Dickinson, chief executive of the BRC.

"On the sunnier side, rainy weather did brighten sales of toys, as parents looked for ways to occupy their children indoors."

Looking ahead, Linda Ellett, the UK head of consumer markets at KPMG's Leisure & Retail division, said that a "consumer reluctance to get out there and start spending" will likely remain in the short term.

"With big increases in labour costs and business rates just weeks away, adding to an already stressed cost agenda for retailers, many will be pinning their hopes on some good news in the Chancellors’ Spring Budget this week to help kick start a spending revival on the high street. As inflation continues to slow over the coming months and household finances are expected to improve, there is some light at the end of the tunnel for weary households."

In corporate news, high street bakery chain Greggs maintained guidance and said it had made a strong start to the current year after delivering a jump in 2023 profits as customers sought out its sausage rolls and doughnuts amid the cost of living crisis.

Shareholders were also rewarded with a special 40p-a-share dividend on top of the 62p full-year payout.

Like-for-like sales in company-managed shops were up 8.2% in the first nine weeks of the year. Pre-tax profit for the year to December came in at £188.3m from £148.3m a year earlier, with total sales rising to £1.8bn from £1.51bn.

Equipment rental firm Ashtead said that full-year group revenues will expand at the low end of its guidance as a result of the previously disclosed slowdown in North America.

The company, which provides everything from emergency response equipment to cameras and lighting for the film industry, said revenues for the 12 months to 30 April are now forecast to grow at the bottom end of the 11% to 13% target range.

Ashtead has seen lower levels of emergency response activity related to natural disasters in the US following strong hurricane, wildfire and winter storm related revenue last year, while longer-than-anticipated actors' and writers' strikes dented demand in Canada.