UK retailers to benefit from ‘staycation’ trends but normality still far away,

UK retailers are emerging from the third national lockdown hoping that it will be the last one to endure but normality remains far away, said a City broker.

As the government limits international travel to avoid the spread of further COVID-19 variants, analysts reckon that the ‘staycation’ trend in the summer will further boost local businesses.

READ: UK greeted by snow on first day of reopening for non-essential businesses

However, although over 39mln people have received at least the first dose of a vaccine, Shore Capital said that it will be a while before retail sales reach pre-pandemic levels.

“Many millions of people continue to work from home (WFH), which depresses commuting activity, whilst social distancing and mask-wearing remains required for shoppers and beer drinkers alike,” analysts said.

“With this context set out, the shoppers of England can be unleashed to go out and buy offline new underwear and socks, celebrating later on with a couple of jars in the pub garden; happy days! For the economy this is good news as workers come off furlough, so making the roads and railways busier, increasing motor fuel demand, for example, increasing household incomes and easing the burden on the ‘Revenues’ coffers somewhat.”

High street survivors, including AB Foods’s () Primark, Next plc () and Marks & Spencer (), are expected to benefit from the collapse of competitors, which will allow to gain market share.

Shore Capital estimated a 5% in offline clothing capacity after major names such as Arcadia and Debenhams ended up folding.

Others, such as (), have already flagged expectations of pent-up demand.

“Channels and industries have adjusted to the pandemic, leading to more streamlined businesses operating in often rebalanced sub-sectors,” analysts concluded.

“Such change means that healthy expenditure has scope to yield positive operational gearing, strong free cash flows, rapid balance sheet repair and better times ahead for shareholders in the discretionary domestic consumer scene. Let us hope so.”