How Has The Retail Slump Caused A Havoc For Employment?

  • January 28, 2020 12:20 AM GMT
  • Team Kalkine
How Has The Retail Slump Caused A Havoc For Employment?

Overview of the retail slump in the UK

Retail sector has been hit the hardest when it comes to the degradation of the business environment in the United Kingdom post the Brexit referendum. In the last one year itself, this sector has seen some of the biggest brands and companies having a fallout in terms of favours with the consumers, as the consumers seem to have lost all confidence in spending. The situation is even worse for the brick and mortar stores, as those who made any spending was mostly online through e-commerce retailers, which has led to a massive slump in the high street and other brick and mortar stores. It was predicted that the Christmas and New Year’s festivities would bring some respite in terms of trading environment, as shoppers will be in a frenzy to buy supplies as well as gift items. This wasn’t to be the case as the festive time for retailers was a period of extreme reckoning, with sales during the period falling to the lowest. This led to a large number of companies and brands, closing down their brick and mortar stores, across the country. Some of the biggest companies such as the likes of Marks and Spencer, Beales and Mothercare closed down their stores and lost their position as market leaders in the respective product categories. Just last week, Beales reported having closed about 22 of its stores, after it went into administration, which led to around 1300 people losing their jobs.

Ten Thousand jobs lost in the sector in 2020

As per a report by a research agency, it has been reported that nearly ten thousand jobs have been lost in the retail sector since the start of 2020. The biggest brands that reported the highest number of jobs losses include Debenhams, Mothercare as well as Ada.

The research group, Centre for Retail Research (CRR), which is in the business of providing expert research and analysis of the retail space as well as the support services for the countries of United Kingdom, France as well as the countries in North America, reported that in the year 2019, the number of jobs lost in the retail sector was 143,128. This report also found that in 2019, 16,073 stores were closed in the country. Both these numbers were comparatively higher, as in 2018 the number of jobs lost stood at 117,425 and the number of store closures was reported at 14,583.

The research outcome also suggested that this slump primarily happened because of four main reasons, which were high costs of running these stores due to high rents, low profitability during these periods, massive increase in competition from online e-tailers, as well as the segment not being attractive to new capital, leading these companies not being able to raise new money.

Though, in these testing times, experts believe that there are positive signs for this industry as well, as post the formal exit of the United Kingdom from the European Union, the situations can start improving. The experts believe that this improvement will be backed by 5G communication technology, which will allow the companies to use Virtual and Augmented reality to improve customer experience. This will also allow the companies to remove long queues at their stores, making the shopping experience much better for the consumers.

Despite the poor performance from the retail sector, a few companies have performed well, either in terms of their stock performance or from the overall performance. We are going to discuss stock price performances of some of the companies who have done comparatively well despite the slump in the sector and outlook for them in the year 2020 looks bright.

Boohoo Group Plc (LON: BOO) Stock Price Performance

As on 28th January 2020, at 08:35 A.M (Greenwich Mean Time), by the time of writing this report, the Boohoo Group Plc Stock was trading at a price of GBX 307.19 per stock on the London Stock Exchange market, a surge in the value of 0.36 per cent or GBX 1.09 per stock, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 306.10 per stock. The market capitalisation (M-Cap) of the stock stood at a value of GBP 3.567 billion, with respect to the current market price of the stock of the company, at the time of writing.

It has been reported that the Boohoo Group Plc stock had gained around 63.75 per cent in value, in the last twelve months, since January 28, 2019, when the stock was trading at a price of GBX 187.60 per stock at the time of the close of the market. It has also been reported that the company’s stock has gone down in the last six months, by approximately 29.07 per cent in comparison with the stock price of GBX 238.00 at the time of the close of the market as on July 29, 2019. Boohoo Group Plc’s stock has been reported to have gained 3.57 per cent, in last 30 days’ time from the stock price of GBX 296.60 per stock that the stock set as on December 27, 2019.

The beta of the Boohoo Group Plc’s stock has been reported to be at 1.60, giving an idea that the movement in the stock price, is more volatile, as against the movement of the comparative benchmark index.Â

Asos Plc (LON: ASC) Stock Price Performance

As on 28th January 2020, at 08:40 A.M (Greenwich Mean Time), by the time of writing this report, the Asos Plc Stock was trading at a price of GBX 3075.00 per stock on the London Stock Exchange market, a surge in the value of 0.36 per cent or GBX 11.00 per stock, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 3064.00 per stock. The market capitalisation (M-Cap) of the stock stood at a value of GBP 2.572 billion, with respect to the current market price of the stock of the company, at the time of writing.

It has been reported that the Asos Plc stock had lost around 6.65 per cent in value, in the last twelve months, since January 28, 2019, when the stock was trading at a price of GBX 3294.00 per stock at the time of the close of the market. It has also been reported that the company’s stock has gone down in the last six months, by approximately 19.56 per cent in comparison with the stock price of GBX 2572.00 at the time of the close of the market as on July 29, 2019. Asos Plc’s stock has been reported to have lost 7.07 per cent, in last 30 days’ time from the stock price of GBX 3309.00 per stock that the stock set as on December 27, 2019.

The beta of the Asos Plc’s stock has been reported to be at 1.58, giving an idea that the movement in the stock price, is more volatile, as against the movement of the comparative benchmark index.

Â

Ocado Group Plc (LON: OCDO) Stock Price Performance

As on 28th January 2020, at 08:47 A.M (Greenwich Mean Time), by the time of writing this report, the Ocado Group Plc Stock was trading at a price of GBX 1290.50 per stock on the London Stock Exchange market, a surge in the value of 0.74 per cent or GBX 9.50 per stock, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 1281.00 per stock. The market capitalisation (M-Cap) of the stock stood at a value of GBP 9.099 billion, with respect to the current market price of the stock of the company, at the time of writing.

It has been reported that the Ocado Group Plc stock had gained around 33.59 per cent in value, in the last twelve months, since January 28, 2019, when the stock was trading at a price of GBX 966.00 per stock at the time of the close of the market. It has also been reported that the company’s stock has gone down in the last six months, by approximately 4.07 per cent in comparison with the stock price of GBX 1240.00 at the time of the close of the market as on July 29, 2019. Ocado Group Plc’s stock has been reported to have gained 0.39 per cent, in last 30 days’ time from the stock price of GBX 1285.50 per stock that the stock set as on December 27, 2019.

The beta of the Ocado Group Plc’s stock has been reported to be at 1.10, giving an idea that the movement in the stock price, is more volatile, as against the movement of the comparative benchmark index.

Comparative share price chart of BOO, ASC and OCDO

(Source: Thomson Reuters) Daily Chart as on 28-January-20, before the closing of the LSE Market

 

With Bank of England reducing the interest rates to a historic low level, the spotlight is back on diverse investment opportunities. 

Amidst this, are you getting worried about these falling interest rates and wondering where to put your money?

Well! Team Kalkine has a solution for you. You still can earn a relatively stable income by putting money in the dividend-paying stocks.

We think it is the perfect time when you should start accumulating selective dividend stocks to beat the low-interest rates, while we provide a tailored offering in view of valuable stock opportunities and any dividend cut backs to be considered amid scenarios including a prolonged market meltdown.

To know more about these dividend stocks, click here

CLICK HERE FOR YOUR FREE REPORT!
   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK