Lockdown 2 sends shares in retailers, pubs and travel firms down
Shares in retail and leisure companies took a battering on the London Stock Exchange on Monday morning as investors reacted to the Government’s weekend announcement for a month-long lockdown in England.
Cineworld, JD Sports, EasyJet, British Airways owner IAG, Wetherspoons, and Mitchells and Butlers all saw heavy falls in their share price on Monday morning.
But there were also winners from the plans to shut all non-essential retailers until December, with Ocado, Just Eat Takeaway, Tesco, Sainsbury’s and B&Q owner Kingfisher all seeing a boost in shares.
Ocado announced profits will now be higher than previously thought – sending shares up nearly 8% within an hour of the stock market’s 8am opening.
Many firms are in a much weaker position now than at the start of the pandemic, making it far more challenging to survive extended closures or demand restrictions
The heavy falls for retailers, pubs and restaurant groups who will be forced to close their doors come as business leaders warned of the economic damage from the second lockdown announcement.
Many also complained that the one-month furlough extension did not do enough to provide longer-term support or guidance to allow for suitable planning.
British Chambers of Commerce (BCC) director general Adam Marshall said: “There’s no getting around the fact that these new restrictions will be a devastating blow to business communities who have done everything in their power to adapt and operate safely.
“Business and market confidence have been hit hard by the unclear, stop-start approach taken by governments across the UK over the past eight months, with little end in sight.
“Many firms are in a much weaker position now than at the start of the pandemic, making it far more challenging to survive extended closures or demand restrictions.
“The temporary extension of the furlough scheme will bring short-term relief to many firms, and responds to chambers’ call for business support to be commensurate with the scale of the restrictions imposed.
“The full financial support package for businesses facing hardship, whether through loss of demand or closure, must immediately be clarified and communicated.
“Sustained help must be available to employers, to the self-employed and to the many businesses and individuals that have not been able to access any of the Government’s schemes to date.”
The new rules mean all non-essential retail must close, including clothing and electronic stores, car showrooms, travel agents, betting shops and car washes.
Cinemas, hairdressers, bowling alleys, leisure centres, gyms, swimming pools, zoos and tattoo parlours – among others – must also close in England.
Restaurants, bars and pubs must close, but can still provide takeaway and delivery services – although takeaway of alcohol will not be allowed.
Hotels, hostels and other accommodation should only open for those who have to travel for work purposes and for a limited number of other exemptions which will be set out in law.