The Tesco share price has been under pressure recently as the Covid-led disruptions continue. The TSCO stock will be in the spotlight today after the latest UK retail sales data. It closed at 231p, which was 3.75% below the highest point this month.
Tesco news. The UK retail industry has been relatively vibrant recently. This is evidenced by the latest UK retail sales. According to the Office of National Statistics, the overall sales rose by 0.5% between May and June. They also rose by 9.5% on a year-on-year basis.
This growth was mostly because of food stores, whose sales rose by 4.2% as the Euro 2020 championship took shape. Non-food stores sales rose by 1.7% while automotive fuels increased by 2.3%. The bureau said that the volume of sales in the three months to June rose by 12.2% compared to the same period in April. These numbers are important to Tesco because it is the country’s biggest retailer.
While retail sales are doing well, there are concerns about Brexit and supply shortage brought about by the Delta variant. This shortage is being known as pingdemic. It happened as hundreds of thousands of retail workers went into isolation after coming into contact with infected people. The shortage and empty stores have affected all retailers like Sainsbury’s, Morrisons, and Tesco.
Tesco shares have also underperformed because of the new Brexit concerns about Northern Ireland. The UK is putting pressure on the EU to renegotiate the agreement.
The Tesco share price has also lagged other retailers because of its large size. While Morrisons is being acquired, there are talks that Sainsbury’s too could change hands soon. Many investors believe that Tesco’s large market capitalization make it unattractive to PE firms.
The daily chart shows that the TSCO share price has been pressured lately. It has moved back to the horizontal channel shown in black. Also, the stock is slightly above the 25-day and 50-day moving averages and is at the 38.2% retracement level.
Therefore, I suspect that the stock will maintain the downward momentum as bears target the lower side of the channel at 220p. On the flip side, a move above the resistance at 235p will invalidate this prediction.
Follow Crispus on Twitter.
