Welcome news of a coronavirus vaccine has sparked a stock market shift as investors rushed to buy and sell shares. Big-name retail and other consumer stocks shunned during the pandemic were back in fashion, while lockdown stars took a hit.
Global stock markets soared after it was revealed on Monday that pharmaceutical developers Pfizer and BioNTech had successfully completed trials of a coronavirus vaccine in six countries, proving it to be 90% effective.
With the prospect of restrictions easing over the coming months, some of the darling stocks of the pandemic saw their luck turn, while other struggling companies returned to favour.
THE WINNERS
Associated British Foods
Primark owner AB Foods’ shares climbed 21.24% on Monday, on the assumption that its shops would reopen for the Christmas rush and stay open.
Primark warned last week that the new lockdown measures would cost it £375m in lost sales as 76% of its store estate closed its doors.
When the first lockdown was lifted in June, Primark emerged as one of the winners as shoppers queued outside its doors.
If a vaccine allows shops to reopen again soon, the retailer is expected to bounce back quickly.
WHSmith
High street and travel hub specialist WHSmith has suffered amid the pandemic as fewer people visited its airport and train station locations.
The retailer has been battered by the effects of the pandemic, suffering a sales decline of 91% year on year at the height of lockdown.
With the prospect of a vaccine meaning more travel may be permitted, whether in the UK or abroad, WHSmith’s share price jumped 32.75% at the start of the week.
Cineworld
Cinema chain Cineworld’s share price jumped 40.3% as the potential for leisure venues to reopen became apparent.
This came after a devastating year in which Cineworld was forced to close its 127 UK cinemas, putting 5,500 jobs at risk.
The company warned it had lost more than £1bn during the coronavirus pandemic due to a lack of customers and the delay of blockbuster films.
While a vaccine could bring the chain the boost it needs, shares still remained 80% below what they were worth at the beginning of the year.
Greggs
Greggs fell to a pre-tax loss of £65m in the 26 weeks to June 27, compared with a £37m profit the previous year.
The food-on-the-go retailer felt the effects of the pandemic on its high street and travel locations, as well as social distancing measures which meant its small stores could not operate at capacity, even for takeaways.
While it is not materially dependent on commuters, unlike competitors such as Pret, the vaccine will enable Greggs to go back to standard and bring customers to the high street. Greggs’ share price leaped 17.88% at the start of the week.
British Land
The share price of retail landlord British Land, which owns shopping centres such Meadowhall in Sheffield, rose 12.33% on the news of a vaccine.
Over the lockdown period, landlords have suffered as retail tenants withheld or deferred rents, and many shifted to turnover-based rents.
Now that the vaccine could bring shoppers back to stores, British Land may enjoy an increase in rent collections in the coming year.
THE LOSERS
Ocado
Ocado’s shares tumbled 8% at the start of the week.
The online grocer, which swapped its partnership with Waitrose for Marks & Spencer Food in September, had previously raised its profit guidance from £40m to £60m as more shoppers turned online amid the pandemic.
Despite the blip, Ocado’s share price still remains 78.22% higher than it was a year ago and it is likely to continue to feel the benefits of a more permanent online shift.
JustEat
As consumers were stuck indoors, many turned to takeaway providers such as UberEats, Deliveroo and JustEat to take a break from cooking and access their favourite restaurants.
JustEat had posted a 46% increase in orders to 151 million at group level during its third quarter, and UK orders rose 43% to 46 million.
However, the news of a vaccine means people are likely to return to eating out, causing the JustEat share price to fall 7%.
Kingfisher
The coronavirus pandemic spurred a home and DIY boom as people in lockdown took the chance to spend the time and money they would usually reserve for leisure activities or holidays on improving their homes.
Amplified by the work-from-home culture DIY giant Kingfisher, which owns B&Q and Screwfix, recorded a 62% rise in statutory pre-tax profit to £398m and a 23% increase in adjusted pre-tax profits to £415m.
However, with more freedom on the horizon as a vaccine is found, the home and DIY sector may struggle against tough comparables when spend switches back to leisure, causing the retailer’s share price to slip 8.5%.
AO.com
Benefiting from the home trend, electricals retailer AO.com generated a sales uplift of 54% in the six months to September 30.
As an online-only retailer, AO.com was well placed to help customers who wanted to kit out their home office or update their kitchens during lockdown.
Expectations that a vaccine means the online shift may ease caused the electrical goods etailer’s shares to fall 11.5% earlier this week.
Zoom
Lockdown darling Zoom, which facilitates everything from quizzes to team meetings to video consultations, suffered a share price fall of 17.4%.
The video-conferencing service boomed during the first lockdown as consumers turned to it to keep in touch with others while under ’stay at home’ orders.
With the potential for a vaccine allowing them to work, shop and see friends as normal, Zoom may decline in importance as fast as it grew.
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