What to watch: Dixons Carphone's online bonanza, WH Smith enjoys strong Christmas, and US inauguration in focus

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·5-min read
KENT, UNITED KINGDOM - 2020/08/04: Tech retailer Dixons Carphone is to cut 800 jobs as it changes the way its stores are managed. The company, which owns Currys PC World, has already started to consult with the affected staff, as it begins to remove roles from its stores. Retail managers, assistant managers and team leader roles will be cut at the company, while new sales manager, customer experience and operational excellence manager positions will be created. (Photo by Dave Rushen/SOPA Images/LightRocket via Getty Images)
A branch of tech retailer Dixons Carphone in Kent. Photo: Dave Rushen/SOPA Images/LightRocket via Getty Images

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Dixons Carphone's online bonanza

Booming online sales over Christmas helped prop up electricals retailer Dixons Carphone (DC.L) while stores were shut due to lockdown.

The retailer on Wednesday said online sales grew by 121% in the 10 weeks to 9 January, making up 75% of the company’s entire sales. Overall, revenue rose by 2% over the festive period.

“We’re winning online, where we’re the biggest and fastest-growing specialist technology retailer in all our markets,” chief executive Alex Baldock said.

“Even where stores have been closed, our work to bring the best of digital and physical shopping to every customer has borne fruit in such innovations as our one-hour drive-thru order & collect and ShopLive.”

The company’s mobile business continues to struggle, with smartphone revenue down 40%.

“The outlook remains uncertain and we’re still far from our full potential,” Baldock admitted.

Shares slipped 1.4%.

WH Smith enjoys strong Christmas

WH Smith (SMWH.L) has surprised the market but announcing bumper trading over Christmas.

The newsagent and stationary retailer said revenue from its High Street stores was 92% of 2019 levels during December, despite lockdowns either side of the month.

Trading has deteriorated significantly since then, with January’s revenue down over 50% on last year. WH Smith said January had been its worst month out of the last five.

“COVID-19 continues to have a significant impact on the WH Smith Group, however we are pleased with our performance over the Christmas period which was better than anticipated,” said chief executive Carl Cowling.

“We remain focused on average transaction values which continue to grow, cost control and operational efficiencies, and I am pleased with the progress we are making, particularly given the backdrop of significantly reduced passenger numbers.”

Shares rose 6.7%.

“The market seems to be retaining its belief in WH Smith’s ability to bounce back from the pandemic,” said Russ Mould, investment director at AJ Bell.

“Supporting this optimism is the liquidity position reported in today’s trading update with the company generating cash in both November and December – no mean feat given the backdrop.”

US inauguration in focus

European stock markets registered tentative gains ahead of Joe Biden’s inauguration as US President on Wednesday.

Biden is due to be sworn in as the 46th President of the United States in a ceremony at the Capitol in Washington DC at 12pm ET (5pm UK) on Wednesday.

“With the pandemic still raging and an economic crisis overlaid on top of that, Biden’s presidency will begin with a pretty full in-tray, and the policy measures can be expected to come thick and fast as the new administration aims to hit the ground running,” said Jim Reid, a senior strategist at Deutsche Bank.

Investors were in cautious mood ahead of the ceremony. The FTSE 100 (^FTSE) opened marginally higher before falling back to trade flat, while the DAX (^GDAXI) and CAC 40 (^FCHI) both rose 0.5%.

Wall Street futures were mostly trading higher ahead of the event. S&P 500 futures (ES=F) were up 0.2%, Dow Jones futures (YM=F) were up 0.1%, and Nasdaq futures (NQ=F) were up 0.6%.

WATCH: What is Joe Biden's plan to rescue the US economy?

JD Wetherspoon losing £4m a week

The pub chain Wetherspoon (JDW.L) has raised £93.7m ($127.9m) selling new shares, as it battles to survive the coronavirus pandemic.

The company sought to build up its cash buffers as it expects its pubs to remain closed by lockdown restrictions until April. It said it was burning through around £4.1m a week while pubs were shut.

The funds raised will also help it cope even if sales are “very low” after re-opening, and even allow it to snap up pub sites “at favourable prices as a result of the pandemic.”

It is considering buying the freeholds of some central London pubs where it is currently a tenant, and properties next door to successful pubs.

The placing of new shares at a price of 1,120p marked a 5.2% discount to the closing price on 19 January, according to an update to investors on Wednesday.

The stock rose over 3% in early trade.

WATCH: Wetherspoon boss blames 'flawed' fatality advice for lockdown hit

Burberry gets Rashford boost

Burberry (BRBY.L) said Manchester United (MANU) and England national football player Marcus Rashford was key to its “highly successful" Instagram campaign, even as retail revenue took a hit due to the coronavirus pandemic.

The iconic British fashion giant said in November it launched its “festive” campaign on Instagram with Rashford, to which the response by consumers was “exceptional.”

“Engagement on our Instagram campaign posts were more than double our Q2 average, and imagery featuring Marcus becoming our most liked Instagram post of all time,” it said.

“Marcus' work to support the UK's youth sits at the heart of our partnership and embodies our commitment to community and going beyond,” it added.

However, its retail revenue fell 5% to £688m ($940.8m) in the third quarter. Retail comparable store sales declined 9% as planned reductions in markdown and reduced tourist traffic in outlets offset high single-digit full-price sales growth, the company said.

Shares rose 5% in early trade.

Inflation jumps in December

The inflation rate doubled last month as prices ticked higher in the run-up to Christmas.

According to data from the Office for National Statistics (ONS) prices in December were up 0.6% on a year earlier, according to consumer price index (CPI) inflation data published on Wednesday.

The inflation rate remains low by historical standards, but most analysts had expected a rise of 0.5%. The figure marks an uptick in the pace of price increases recorded by the ONS, with November seeing only a 0.3% year-on-year rise.

Higher prices for transport, recreation and culture were flagged by statisticians, despite food and drink prices falling.

WATCH: Inflation ticks higher as clothes prices edge up after Black Friday sales

Additional reporting by Saleha Riaz and Tom Belger.