What does the reopening mean for food and drink stocks?

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What does the reopening mean for food and drink stocks?


With the FTSE250 at pre-Covid levels, and the FTSE350 actually trading higher, we look at how grocery, retail, leisure and food to go stocks have fared
This week’s grand reopening has been something of a damp squib for retail and food and drink stocks in the City.

The thawing of lockdown and reopening of non-essential shops and pubs was met with a shrug by investors, with the FTSE 100 edging down 0.1% on Monday and the FTSE 250 down 0.4% with little positive movement for retailers or pub groups at the start of the week.
Despite headlines about shoppers queuing round the block to get into clothes shops and scrambling to book tables at pubs, both the general retail and food retail sectors started the week down.

That’s because news of the reopening schedule has already been priced in for UK-based grocery, retail and leisure stocks. After all, the ending of lockdown has been well signposted for months, and it is the lack of new news that is the City’s major focus – rather than getting giddy over the highly publicised progress out of lockdown. Indeed even Tesco’s results today, and takeover speculation swirling around Sainsbury’s as a Czech billionaire builds a stake in the Holborn retailer, has done little to either spook or excite the markets.
The biggest news, in this context, was the announcement of rapid progress on vaccines made in November last year.

Since that news, and despite a third national lockdown, there has been a sustained uptick in share prices – especially among pubs, shuttered retailers and food-to-go specialists – to such an extent that a 25% spike in the overall FTSE 250 means the index is currently 2% higher than it was pre-Covid.
However, they generally still trade significantly down on pre-Covid levels.

Take listed pub stocks. Share prices have rallied strongly as the vaccine rollout has progressed. Up by more than double in many cases. But crucially all are still short of pre-Covid prices:

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