It’s been a turbulent six months on the Stock Exchange. So who’s struggled the most? Who’s least affected? And is there any stock actually still growing?

‘What goes up, must come down’ has been the story of the stock market so far in 2022, as swathes of companies boosted by a spike in pandemic business have slumped in value amid soaring inflation, weakening economies and global instability


Few sectors demonstrate the first-half trend more clearly than consumer-facing tech brands. Stock market darlings during the pandemic – including global behemoth Amazon and tech contemporaries Apple, Alphabet and Microsoft – have slumped by double-digits as the strong growth they enjoyed has been replaced by concerns over consumer confidence.

Looking at the grocery sector, this has clearly bled into online-focused names. Seven of UK grocery’s 10 biggest stock market fallers are digitally focused, including Naked Wines, Deliveroo, Just Eat and Ocado.

To some extent this represents market gravity. Take Ocado: it is around 72% down from its early 2021 peak, after its shares soared on surging UK demand for online grocery and the structural growth of grocery across the world as it internationalises its business. But that drop is a more modest 27% from its pre-pandemic level.

The same applies to Naked Wines. While shares have slumped over 40% in June over its gloomy outlook and a sharp decrease in new customers, the shares are still only down 20% from pre-Covid levels. Indeed, broker Jefferies backs the structural growth opportunity for the stock despite its rerating: “The combination of short-term cost headwinds and underlying payback shortfalls is rightly seeing the model tweaked… [But] Naked continues to be a very well-positioned business, with a vast total addressable market.”

New listings

Notably a number of the few recent consumer IPOs have been in the consumer tech space – and these new listings have suffered since achieving strong valuations at launch.

This trend encompasses 2021 listings Virgin Wines and Parsley Box (which has also encountered troubled trading and lower-than-forecast growth numbers), but most notably high-profile IPOs Deliveroo and THG.

Deliveroo shares are at less than a quarter of their listing price, and have suffered from the wider tech sell-off and investors souring on the food delivery model. Dan Thomas, analyst at Third Bridge, commented: “Despite seeing a huge surge in revenues since the pandemic, Deliveroo continues to be unprofitable… Competition amongst food delivery companies is relentless, making it unlikely that Deliveroo will be able to reduce its high marketing expenditure any time soon.”

THG Brighter Foods

Source: THG

E-commerce retailer group THG is down 90% on its post-float January 2021 highs

THG has had a troubled time on the market since launch, beset by concerns over governance, clarity around its key Ingenuity business and disappointment that rumoured bids have come to nothing. Founder Matt Moulding has bemoaned the group’s experience on the public markets, with the group down 90% on its post-float January 2021 highs. However, the group has largely stemmed the share price bleed since March, with Jefferies noting: “Progress on governance should help rebuild confidence at a time when THG’s valuation compares unfavourably to peers, with lower margins/growth and more elevated cash burn.”

Profit warnings

The biggest UK faller, household products player McBride, is indicative of both the individual travails of the stock and the wider impact of mounting costs on consumer goods manufacturers.

Loss-making McBride has issued several profit warnings over the course of the past year, as costs spiralled and it attempted to push through several rounds of price increases to its retail customers.


Source: McBride

Household products manufacturer McBride has issued several profit warnings over the past year

DTC ready meal supplier Parsley Box also struggled with availability issues, leading to a downgrading of its profit expectations. Increased costs also led to the likes of Unilever, Reckitt Benckiser, Fever-Tree and Greggs also issuing more general warnings of margins being squeezed in recent times.

Another name to issue a profits warning, this time related to availability problems for important lines in December, was convenience chain McColl’s. The retailer did not last long enough to make the half-year share price analysis, collapsing into administration (and wiping out all shareholder value) in May after failing to agree a financing package with lenders, before being rescued by wholesale partner Morrisons after a battle with EG Group.

Meat alternatives

Internationally, a number of the fallers follow a similar pattern, with online-focused names like Delivery Hero and HelloFresh (as well as the biggest online retailer of all, Amazon) losing significant value.

However, two of the top three also share the notable trend of being plant-based – meat alternatives producer Beyond Meat and dairy-free milk supplier Oatly.

Both share the trend of toppy IPOs coming back down to earth (Beyond Meat’s in 2019 being the US’s best-performing new issue since 2000, while Oatly was valued at $13bn on its first day of trading in May 2021).

But both have failed to deliver on lofty growth forecasts, more so than investor sentiment turning against the wider and fast-growing plant-based category.

As The Grocer reported last week, Beyond Meat’s shares have been sliding in earnest since mid-2021 amid weakening restaurant sales, a costly global rollout, and larger-than-expected quarterly losses.

Oatly has suffered from production issues that have left it unable to fulfil growing demand for oat milk, and seen its market share slide in the crucial US market and its sales outlook slashed. Meanwhile, rampant cost inflation has seen its losses expand.

Retail giants hit by economic jitters

Economic bellwethers for consumer spending, particularly in the US, have suffered in 2022 amid concerns over the impact of economic slowdowns and rising inflation on shopping habits.

Consumer behemoths Amazon (–34.7%), Starbucks (–34.7%) and pharmacy chain Walgreens (–27.3%) have all suffered under the weight of slowing sales growth and concerns over discretionary spending as customers tighten their belts.

This retail downturn has hit the UK too – while the remaining listed supermarkets are not amongst the market’s worst performers, they have underperformed the wider market considerably (the FTSE 100 is down just 2.9% in the first six months) with Tesco down 11.9% and Sainsbury’s down 26%, despite being the best performers amongst the big four supermarkets.

Concerns over the rising market share of the discounters and hard-up shoppers trading down have weighed on the shares. Sainsbury’s, in particular, has also been hit by its exposure to the more problematic general merchandise category, given its ownership of Argos. Hargreaves Lansdown warned margins could yet come under pressure, despite the supermarket maintaining guidance, as there is “a limit as to how much fat can be trimmed”. “If costs keep rising, margins will feel the effect and it wouldn’t be a surprise to see profit guidance come under pressure again at some point this year,” it stated.

Elsewhere, B&M Bargains owner B&M European Value Retail has suffered (–41.9%) after surging share price growth during the pandemic, as elevated Covid sales have created tough comparatives and, according to Shore Capital, concerns over the cost of living squeeze and its effect on “B&M’s lower-income consumers”. The stock has also suffered from jitters over a change in leadership as longtime CEO Simon Arora steps down.

Marks & Spencer (–41.4%) has suffered through its exposure to online grocery partner Ocado Retail and general merchandise, despite a solid turnaround in trading momentum, particularly in grocery.

Global fmcg less affected

Despite soaring costs and supply chain challenges, the globe’s largest fmcg firms have come through the first half of 2022 relatively unscathed compared to other consumer-facing players.

US consumer giants Hershey, General Mills, Kellogg’s, Post Holdings and Coca-Cola are all in first-half share price growth despite the global economic instability. These big names have been boosted by geographical spread – being therefore less exposed to markets experiencing soaring inflation – as well as their ability to push through price hikes in more mature markets.

Additionally, the rebound of restaurants and foodservice has benefited big brands such as Coca-Cola, which have more diverse market exposure than grocery-focused suppliers.

The UK market’s big fmcg brands, such as Reckitt Benckiser (–2.7%), Unilever (–5.8%) and Diageo (–12.5%), have seen a share price slide, not helped by the weakness of the pound, but more modest than many sector contemporaries.

One supplier to have seen a small boost is Premier Foods (+0.9%) despite coming off huge pandemic gains, as it has shrugged off rising costs to expand profits and continues to take market share.

Tobacco rides out volatility

Tobacco is widely seen as one of the most defensive consumer stocks in a defensive sector – and 2022 is no exception, despite widespread disruption in major markets in eastern Europe.

Both Imperial Tobacco and British American Tobacco were forced to sell off their Russia divisions after the country’s invasion of Ukraine, but investors have been undeterred, with their shares up 28.7% and 13.6% respectively.

Stable earnings growth – as prices continue to rise ahead of inflation – and the usual bumper dividends have proved popular with investors as a safe haven from instability. Portfolio progress towards tobacco alternatives while maintaining profits has also reassured the market over the profitability of next-generation products, as industry players continue to plan for the structural decline in cigarette sales.