High Street fortunes pick up after Christmas sales surge

New Year delivered a much-needed dose of optimism to the high street retailers as strong Christmas trading marked a turnabout in the sector.

As analysts such as Douglas Jack of Panmure Gordon revised their target share prices upwards across the board, early indications from groups including Barracuda and Inventive Leisure showed like-for-like Christmas period sales up by over 2 per cent.

These results were arguably more impressive when the effective loss of two Saturday nights of busy trading on Christmas and New Year days were taken into account.

"Favourable Christmas trading at Inventive Leisure and Barracuda indicates that smaller, nimbler businesses are performing better than pub conglomerates," Mr Jack advised. "It supports our belief that High Street supply, demand and pricing is stabilising, with positive implications for Regent Inns, Luminar, Urbium and Restaurant Group."

Of the major operators, Panmure increased target share prices for all high street groups, although clients were advised to hold on Mitchells & Butlers (M&B), and continue to sell JD Wetherspoon stock. Nonetheless, M&B shares were pegged 30p higher and even Wetherspoon had its target price increased by 5p a share.

This up-beat outlook was in stark contrast to very mixed messages from the high street shopping sector, which, according to the CBI, relied more heavily on discounting to entice customers through the door. Moves to curb heavy discounting and improve on the quality of the offering among the high street drinks retailers appears to be paying off.

Once again the resilience of the pub sector was proven with the British Beer & Pub Association (BPA) estimating that 15m people visited the pub every week over Christmas, drinking a total of 270m pints of beer over the festive period.