Shares in key retailers were marked down on Monday despite optimism as ‘non-essential’ shops opened their doors for the first time in months.
Retailers are hopeful of high footfall and are welcoming longer opening hours, yet share prices had already risen to discount today’s grand reopening and investors are watching to see if consumers will eagerly return to brick and mortar shops or whether they’ve become addicted to the online channel.
Despite queues forming outside its store in Birmingham before the shutters were pulled up, shares in Primark owner Associated British Foods (ABF) slipped 2.7% to £24.16 early on, while JD Sports (JD.) cheapened 1.2% to 905.6p, even after big queues had formed at its flagship Oxford Street store in London before the doors opened.
Shares in high street stalwarts Next (NXT), WH Smith (SMWH), Marks & Spencer (MKS) and Dixons Carphone (DC.) were all lower on Monday too.
Under the Government’s reopening roadmap, non-essential stores in England can reopen from today as lockdown continues to ease; this includes clothes shops, book shops, department stores, mobile phone shops, betting shops, car dealerships and shops such as florists and hairdressers.
Face masks and social distancing will still be necessary, but for a good proportion of the population the chance to get out of the house and get back to something which resembles normality can’t come too soon.
Primark doesn’t sell online at all, so its stores - which have been closed for most of the last year - are likely to be rammed with shoppers desperate to stock up on cheap clothes the minute they open.
High-street institution Marks & Spencer has been open for food but closed for clothing and homewares, so the escalators are likely to be busy today as the top floor opens in most towns and cities. For more on the likely reopening winners, read Shares’ recent retail sector report here.
THE EXPERT’S VIEW
Russ Mould, investment director at AJ Bell, explained: ‘The presence of snow in parts of the country was a nasty surprise as retailers and leisure operators opened their doors for the first time in months. They will be hoping the white stuff doesn’t settle and that sunshine quickly brightens the public’s mood.
‘Reports on social media would suggest that hairdressers and barbers needn’t worry as demand is sky-high. A lot of pubs have also seen strong bookings, which means all eyes are on the retail sector to see if people are happy to get back in the shops or whether they’ve become addicted to the online channel.
‘While it is possible that we’ll see plenty of people venturing into the shops today, particularly as it provides an excuse to finally get out of the house, retailers need strong footfall to be sustained for more than just a few days otherwise they face more difficult times ahead. It seems inevitable that we haven’t seen the last of the retail sector casualties.’
