Food and general retailers alike edged up ahead of the market as the dog days of August got under way. Each continues to lag the All Share index over the year, however.

Supermarkets’ shares shrugged off the Government’s announcement of the creation of an adjudicator to oversee the Groceries Supply Code of Practice. Every grocer’s share price rose over the week to Tuesday’s close.

Wednesday brought Next’s first-half update, including a warning that there has been a “noticeable cooling in retail demand in recent months”. Trading conditions will tighten in the second half. However, Next said full-year profits should meet expectations. UBS, advising buy, said that the uncertain climate means there is a “slight downside risk” to next year’s forecasts.

Collins Stewart said that Next appears to be losing market share to Marks & Spencer, which this week appointed former WHSmith man Alan Stewart as finance boss.

Execution Noble was pleased by the hiring and said Stewart “could have both the consumer-facing and cash-focused experience to help steer the M&S ship”, given his previous experience. The broker maintained that “Stewart is a sharp character who might prove to be the gross margin and cash-conscious foil” to M&S chief executive Marc Bolland’s marketing prowess. Collins Stewart and Execution stuck to their hold stance, pending M&S’s strategic update in November.

Carpetright said it remains cautious about prospects after group sales slid 2.5% in the first quarter and by 3.4% like-for-like in its core UK market. Singer was disappointed by Carpetright’s update. The broker has a target price of 600p and said: “Given there is a chance that, from a cyclical perspective, housing activity levels could slump back again in the second half, Carpetright’s rating appears over-inflated.”

KBC Peel Hunt rates Carpetright a hold and said: “With the UK carpet market thought to be down by 20% to 25% over the first quarter, Carpetright continues to outperform and remains well placed to recover peak profit levels over time.”

Buy Halfords, advised Arden Partners. The car and bike specialist’s recent update was “slightly disappointing”, but the reasons were understandable, Arden said. The broker stuck with its profit forecast of £136m and reasoned: “The key thing is that Halfords has reiterated its full-year view of mid-teens earnings growth, given good cost control and the benefit of the recent Nationwide Autocentres acquisition, which continues to integrate well.”

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