Nearly every facet of our lives was affected by the coronavirus epidemic. The retail industry was the most affected, with major changes in the way they do business and how consumers deal with them. These changes were clearly seen in the retail stock exchange.
Many retail shares have seen their value drop dramatically due to the pandemic. The retail stock market has seen rapid growth since the COVID-19 effect in 2020 and through the start of 2019 onwards.
By reading on, you will gain a thorough glimpse into the many ways that the pandemic has affected retail shares, and what this might entail for the future retail stock market – and its professional traders.
Is there any impact on retail stock shares from the pandemic?
- The initial wave
In the first stages of 2020, retail shares were affected by the pandemic. The majority of countries placed their first restrictions on retail sales once the pandemic became a serious global problem. Businesses were shut down and workers sent home. The smooth flow of retail sales seemed to have stopped.
There were many stock price drops across the market due to the uncertainty surrounding the retail industry’s financial future. Low sales rates meant that traders started questioning the likelihood of success for retail businesses. Stock values began dropping.
Some companies even saw greater misfortune and went into administration – along with all their shares. Debenhams (DEB), one of the UK’s major retailers, went into administration in April 2020, before succumbing to liquidation in December. All shares were suspended as a result. Whilst the majority of retailers’ shares were heavily affected, some suffered outcomes worse than others.
- Retail bouncing back
Fortunately, some businesses began to recover from the effects of the pandemic by 2021. This was due to the way these retailers dealt with e-commerce.
Because physical stores were difficult to reach, many consumers have turned to the internet for their shopping needs. Through 2021, nearly half of UK’s non-food retail sales took place online. This allowed for increased investment in stock retail and helped to save retail shares.
Next (NXT) shares increased to an all-time high in April 2021, reaching £82.32. This is due in large part to the 60% increase of online sales since last year. Next focused heavily on their online retail engagement, and also offered homeware products which were in high-demand throughout peoples’ home isolation period.
ASOS (ASC), and Boohoo(BOO) both increased earnings per share (EPS), respectively, for the year ending February 2021. This was 39% more EPS for Boohoo than 2017, and 67% for ASOS. This is a reflection of an increase in both the corporate value and shareholder interest. Peoples’ desire for comfortable lounge clothing, and the easy access of online retail was a huge factor in these developments.
- Recurring challenges
However, share values continued to decline after 2021’s repeated lockdowns. ASOS’ share price fell by 52% in the last quarter 2021. This retailer, amongst others, was impacted by the more severe lockdowns and increased variant cases – delta/omicron.
Due to people being unable to work or business revenues suffering, less money was flown into retail markets. Many retailers also lost time due to this disruption in their production chain, which meant that many businesses were unable to provide consistent product supply, which resulted in stock losses.
- Positive outlook for 2022
The current retail market state (February 2022) is still uncertain. There are many retail stock value fluctuations. However, there are some promising signs for the future.
Globally, vaccination rates are rising and there is no restriction on the amount of retail that can be done online or in-person. Many companies are adapting their business models to make it more convenient for customers who live in the home. For instance, Amazon claim that their in-home entertainment platform Amazon Prime, is their ‘secret sauce’ for shares growth in 2022.
These predictions could help in the recovery and growth of retail stock prices. They also point to a bright future for retail share traders. There is always room to profit when stock trading takes place in such times. You can explore different stock trades through a platform like Plus500 stock stock trading and profit from these value movements while you still have the opportunity.
The post A Review of Retail Stocks — How the Pandemic has Affected Shares appeared first on Entrepreneurship Life.