Where next for Tesco PLC, Next plc, J Sainsbury plc and Marks and Spencer Group Plc?

Do these retail shares have upside potential? Next plc (LON:NXT) (NXT.L), Tesco PLC (LON:TSCO) (TSCO.L), J Sainsbury plc (LON:SBRY) (SBRY.L) and Marks and Spencer Group Plc (LON:MKS) (MKS.L)

Marks and Spencer
Marks and Spencer

The retail sector continues to experience a challenging period, and that’s why I’m considering the outlooks for Next plc (LON:NXT) (NXT.L), Tesco PLC (LON:TSCO) (TSCO.L), J Sainsbury plc (LON:SBRY) (SBRY.L) and Marks and Spencer Group Plc (LON:MKS) (MKS.L). Do they offer investment appeal?

Next’s performance so far this year has really impressed me. It has been able to outperform some of its peers during what has been a difficult period due to weak consumer confidence.

With online growth set to remain high and the company having what seems to be a solid balance sheet, I remain upbeat about Next’s investment potential. It remains one of the most appealing options in the retail sector to my mind.

Sainsbury’s is a stock that could surprise the market over the medium term. The tie-up with Asda could lead to a stronger business which may have an advantage over sector peers dur to a lower cost base.

Additionally, Sainsbury’s has a relatively loyal customer base to my mind, with investment in customer service helping to maintain its position. With a recent track record of sales growth, the company may be able to outperform many retail sector peers in the medium term.

Tesco’s comeback has been stronger than many investors thought it would be. The company has been able to deliver 10 successive quarters of like-for-like sales growth, and this is set to transform its profit growth.

With Tesco’s acquisition of Booker, it has strengthened its investment appeal in my view. The deal with Carrefour may also positively impact on its financial performance and share price in future.

Marks and Spencer has put in place what appears to be a major strategy shift. It is focusing on the fundamentals of the business, which could be a good idea as it seeks to become more efficient and flexible.

With Marks and Spencer still having a high degree of customer loyalty and a dividend yield of around 6%, I think it has investment appeal. While it may struggle to compete online in the near term, its performance in the long run could be impressive.

About Robert Stephens 3883 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email [email protected] or use one of the other contact methods available on the 'Contact Us' page