As Shop Queues Build, Retail Confidence Is Sure To Follow
On the 15th of June, UK retailers that hadn’t previously been deemed as essential were permitted to open up physical stores once more, after the coronavirus death toll saw a continual decrease. This alone would be a positive sign for the UK retail sector, but with it came floods of returning shoppers, all looking to pick up a great deal in the “Sale of the Century” (despite there being very few sales on).
High Street Woes
For shops such as Primark, who have struggled in recent months as they lack an online store, lockdown has been difficult. They saw their parent company’s share price fall by around 30%, and many doubted if they would be able to adequately recover once shops reopened due to relatively low consumer confidence.
The appetite for retail demonstrated recently, however, will be a significant positive for Primark and heralds a great outlook for the company as the country emerges from lockdown.
The reopening of the economy has come very shortly after it was revealed that the UK economy shrunk by over 20% in the month of April alone.
The revelation then led Prime Minister Boris Johnson to encourage shoppers to head out and spend in their droves, as any further decreases to the economy could, and still might, have lasting effects for years to come.
In terms of short-term investments, the retail sector could be a wise area to look into. Shares such as the previously mentioned Associated British Foods are likely to see a return to form, as their subsidiaries return to (almost) usual operations.
ABF is still well below the highest level it reached before the pandemic, and there is nothing to say that it won’t be able to return to that mark once again. Shops such as Primark are necessities for some, and have such a wide target market that they are unlikely to go under.
In the long-term, however, the forecast remains shaky. Whilst good for business, the flood of customers may lead to a second wave of the pandemic, which could cause a second economic dip. When investing, it will be wise to invest in various stocks on a short term basis, so you can get out of bad investments if the situation worsens.