A new wave of shop reopenings could boost economic sentiment as workers return from furlough, while shoppers will look for bargains in the expected heavy clearance to get rid of stock.
Prime Minister Boris Johnson confirmed late on Monday that almost all non-essential retailers in England will be able to reopen in just over a fortnight.
Outdoor markets and car showrooms will be able to reopen from 1 June, as their larger spaces allow for easier social distancing, while all other businesses are expected to restart on 15 June.
Clive Black at Shore Capital said that the best-placed stocks will be “survivors” of the crisis with strong balance sheets, with chances to seize opportunities that may emerge.
The former top-rated analyst highlighted Associated British Foods PLC’s (LON:ABF) Primark and Next PLC (LON:NXT) in the fashion space and pet products retailer Pets at Home PLC (LON:PETS), which has been trading at a limited capacity.
“Lockdown has caused considerable damage to the UK consumer economy, one that leads us to characterise calendar year 2020 as one of an earnings and dividend wipe-out,” Black said.
“Sales recovery, stock clearance and so margin depletion or otherwise will vary by sector and fascia but we expect 2021 to be one of stabilisation at this stage, much depending upon the level of collateral damage or otherwise to the wider domestic economy, with rebuild set for 2022.”
'It is our intention for outdoor markets and car showrooms to reopen from 1 June... then from 15 June all other non-essential retail' says Prime Minister Boris Johnson.— SkyNews (@SkyNews) May 25, 2020
Live updates here: https://t.co/o2ukjTDxRh pic.twitter.com/A83c7afZrq
Various shops plus tailors, auction houses, photography studios and indoor markets will have to pass the government’s five tests to meet safety guidelines.
Retailers will be encouraged to store returned items for 72 hours before putting them back on the floor, to place protective coverings on large items touched by the public, as well as frequent cleaning of surfaces that are touched regularly, including self-checkouts and trolleys.
Hairdressers, nail bars, beauty salons and the hospitality sector remain closed because of the higher risk of transmission due to longer times of contact between people.
Businesses not complying with the law face fines and jail sentences of up to two years.