Election results a mixed bag for retailers
The immediate impact of last week’s election was a mixed bag for retailers in the UK, with some share prices falling whilst others were on the up following the result.
As the pound fell following the election result, so did many retailers’ share prices, for example Next fell 173p to 4171p, and M&S 14.37p to 353.33p. Both companies' share prices have since begun to rise, but not to pre-election levels (Next and M&S opening on 14 June at 4276p and 363p respectively).
With analysts predicting that consumer confidence and spending will also fall in the wake of the election result, many retailers could also see a negative effect on their sales in the coming weeks and months.
However, some retailers’ fortunes may benefit from the result. UK retailers with strong international sales may do well from increased foreign spending thanks to a weaker pound – for example, Burberry's share price rose to 1760p after the result (from lows of 1706p the day before). Its share price is now settling back to previous levels, opening at 1707p on 14 June.
Some companies have also expressed optimism at the chance of a “softer” Brexit due to the weakening of “hard” Brexiteers’ influence in Government.
However, the hopefulness that a chance of retained freedom of movement inspires may be outweighed by the uncertainty that the UK now faces in EU negotiations - the ultimate impact that this will have on the retail market remains to be seen.