Disappointing BRC sales figures for November led to general retail shares underperforming the overall market, although the grocers did better. Like-for-likes were up just 1.8% over the month, hit by mild weather affecting clothing sales and falling food price inflation.

Numis said the figures indicated that two-year sales were still in negative territory for the vast majority of retailers, and highlighted concerns for next year. “While Christmas occurs with unerring reliability, November’s stats sound a note of caution for 2010”, the broker said.

Shares in Game lost a quarter of their value over the week to Tuesday, when the company reported a slump in sales. Like-for-likes plummeted 15.1% over the 44 weeks to December 5, and 13.9% over the final 18 weeks of the period.

However, Investec remains a buyer of the shares, saying that longer term trends in the gaming industry are positive, with a strong release schedule for next year.

Other brokers were not so enthusiastic, with Noble rating the shares as negative. “Despite the lowly valuation we struggle to formulate a positive investment case at this point,” said analyst
Sanjay Vidyarthi.

Market leader Tesco issued a solid third-quarter update with total sales up 8.8%, excluding petrol. UK like-for-likes edged up 2.8%, also excluding petrol, which in the absence of inflation the company said was driven by strong volume growth. TNS data this week showed Tesco’s market share being static.

Oriel Securities described the update as “a rather lacklustre effort”, although the broker retained a buy recommendation. “We were expecting a little more from Tesco,” said analyst Jonathan Pritchard, who described the shares as “a core holding for now rather than a race-away buy”.

Morrisons was the star performer in the TNS data, reassuring that the departure of Marc Bolland has not led to a meltdown at the grocer. “Morrisons’ 9.4% growth remains the fastest and provides some early reassurance that the departure of chief executive Marc Bolland is not impacting near term trading,” said Bernstein’s Chris Hogbin.

Kingfisher’s shares were down over the week despite an impressive third-quarter update that showed an improved performance in all key territories and pre-tax profit of £227m, which was ahead of expectations. Buy, says UBS broker Andy Hughes. “For 2010-2011 management understandably remains cautious, but there are still a number of identifiable profit drivers”

Carpetright reports interims next week. Buy, says KBC Peel Hunt, which expects the company to deliver record sales this year on the back of Allied Carpets’ collapse and new contracts with house builders and insurance companies.

Electricals giant Kesa also reports interims next week.

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