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LONDON, Dec 13 (Reuters) - Britain's retail sector was
boosted by Prime Minister Boris Johnson's resounding general
election victory on Friday, as investors factored in
expectations of a step-up in consumer sentiment and spending in
the key holiday season period.
The poll victory will allow him to end three years of
political paralysis and take Britain out of the European Union
within weeks.
Shares in three of the UK’s four biggest supermarket groups
- Tesco, Sainsbury's and Morrisons -
were up 4.1%, 3.6% and 2.3% respectively by 0921 GMT, while
clothing and food retailer Marks & Spencer was up 9.4%.
Analysts said pent up consumer demand could find a release
in big grocery shops in the lead up to December 25 and higher
spending on so called "big ticket" items.
The protracted uncertainty around Brexit and the incessant
media coverage was strong enough for consumers to reduce volumes
in by 100 to 150 basis points, according to Bernstein analyst
Bruno Monteyne.
"This is just in time for the most important food retail
trading event: Christmas where families traditionally trade up
when they feel good," he said.
The pound rallying to an 18-month high versus the U.S.
dollar should further benefit retailers as it reduces the cost
of importing goods and raw materials.
Shares in Associated British Foods, the owner of
fashion retailer Primark, were up 5.9%, while shares in Next
increased 4.2%. Both chains source the majority of their
goods in dollars from Asia.
Uncertainty about Brexit and the election has weighed on
Britain's property market this year.
With the path now clearer, at least in the short term,
shares in Kingfisher, the owner of Britain's biggest
home improvement company B&Q, were up 5.4%, while electricals
retailer Dixons Carphone was up 8.1%.
(Reporting by James Davey; editing by Mike Harrison)
