Charlotte Street Partners



Tale of two lockdowns

Written by Ralitsa Bobcheva, associate 
Edited by Harriet Moll, creative director
2 November 2020

Good morning,

As businesses brace for a second national lockdown starting this Thursday, should investors look back to earlier in the year to see who the winners and losers will be this time?
If the big winners of the first lockdown are well-known – tech, tech and technology – this time round, changes in consumer behaviour and adapted business models may set the odds in a slightly different direction. 
See the latest results by leader in streaming services Netflix. The Netflix boom prompted by the first lockdown between March and July seems to have come to an end. The streaming giant added only 2.2m new subscribers in the last months to October, well below the 16m and 10m it added for the first and second quarter this year. Another online trend we might not be willing to welcome back, Zoom parties didn’t last beyond the end of lockdown and Zoom’s share price has taken a dip on recent weeks as subscriptions levels out.
Consumer goods companies like Unilever, Reckitt Benckiser and Nestlé meanwhile recently reported not only better than expected results for the third quarter but also the highest growth numbers in years, indicating a pandemic induced shift towards home comforts which has allowed these historic brands to emerge stronger than they were in the pre-lockdown era. 
I would be wary to brand this a back-to-basics trend just yet, though. Boosted by growing consumer sentiment towards more mindful spending, a great number of small retailers have successfully adapted their business models and begun to market their products online. 
And while consumer behavior remains unpredictable, research shows that shoppers are keen to support local businesses whose products can be found online, thus accelerating the trend towards local, eco-conscious and sustainable consumption. 
This second lockdown in England will test small and big businesses alike; tens of thousands more people are likely to lose their jobs and more businesses will close. We hope that many more have harnessed the last few months to regroup, adapt or pivot as they prepare to face into this fresh blizzard.   


The prime minister is expected to address the House of Commons today amid hints from Michael Gove that England’s new national lockdown may last beyond 2 December and that ministers will be “guided by the facts” as the new measures are due to come into force from Thursday. As part of the lockdown; pubs, restaurants, gyms, non-essential shops and places of worship will close while schools, colleges and universities can stay open.

There has been a growing influx of middle-income families who have been forced to use food banks and claim welfare benefits for the first time during the pandemic, the Feeding Britain network has identified. The cohort of ‘newly hungry’ are typically younger people with mortgages, cars and often self-employed who had been plunged into crisis by Covid-related job losses.

US president Donald Trump and his opponent candidate Joe Biden have been campaigning across the nation. President Trump visited key battleground states while the Democratic candidate addressed people at a campaign event in Pennsylvania. Ahead of Tuesday’s general election, Biden maintains a strong national lead according to the vast majority of polls.

Business and economy

Leaders of the UK aviation industry have made new pleas for emergency financial support as the new nation-wide lockdown has put a ban on foreign travel as well as overnight stays in the UK. In a joint statement, Tim Alderslade of Airlines UK and Karen Dee of the Airport Operators Association asked for sector-specific support as the new restrictions come into force.

Representatives of the CBI, Association of Colleges and Trades Union Congress have urged ministers to increase college funding by 40% and give newly unemployed workers cash to retrain amidst mounting criticism of the government’s efforts to tackle rising UK unemployment. Among the proposals are ensuring people could access benefits while training, as well as a job training scheme alongside furlough. (£)

Significant parts of the north of England and the Midlands are being cut out of funds for allocating money for housing projects, in a move that has prompted questions about the government’s levelling-up agenda. The uneven split is a consequence of a Treasury rule – the so called 80:20 rule – aimed at ensuring that the money goes to affluent southern areas. (£)

Columns of note

Ahead of the U.S. presidential election this week, Jill Lepore elaborates on the problem of election predictions. Writing in the New Yorker, she argues that the first obstacle to projecting a winner early is voting by mail. The second is that simply there has never been an election like this before. (£)
In the Financial Times Nicolas Petit turns to the generally overlooked “Brussels defect”, that is, Europe’s lagging economic dynamism. The only way to address this in a way that fosters entrepreneurship and innovation that can compete with US and China would be forEuropean policymakers to stop standing in the way of digital change, but also take firm steps to embrace it, Petit argues. (£)

Cartoon source: New Yorker


The week ahead

All eyes are set on the US this week, with the US elections taking place on Tuesday, a Federal Reserve meeting and the release of the latest job figures. 
Elsewhere, central banks are in focus, with the Bank of England and the Reserve Bank of Australia setting new policy while central banks in Malaysia, Norway, Poland and the Czech Republic meet this week. 
There are also a number of key earnings results out in the UK, especially retailers Marks and Spencer and J Sainsbury as the latter’s new chief executive is reportedly considering selling the company’s banking arm.
Paypal is set to give its first update today since announcing its expansion into cryptocurrency. Nintendo, Uber, Peloton and Dropbox are publishing their results on Thursday. 
A few big pharma companies are also reporting, with Bayer issuing its third-quarter earnings on Tuesday and AstraZeneca expected to announce its results on Thursday.
Food delivery group GrubHub will release its third-quarter results on Wednesday. Starbucks, Kraft Heinz and YUM! Brands are due to do so the day after.
In other news, Canada’s Wheaton Precious Metals – one of the world’s largest companies involved in the buying and selling of gold and silver – is scheduled to list on the London Stock Exchange on Wednesday.
Several banks among which BNP Paribas and Crédit Agricole are reporting their third-quarter results on Tuesday and Wednesday respectively. Results by French bank Société Générale, Netherlands bank ING and German lender Commerzbank will then follow on Thursday.

What’s happening today?

Brighton Pier    
Lok N Store


Zephyr Energy

UK economic announcements
(09:30) PMI Manufacturing

Int. economic announcements
(08:55) PMI Manufacturing (GER)
(09:00) PMI Manufacturing (EU)
(15:00) ISM Manufacturing (US)
(15:00) ISM Prices Paid (US)

Source: Financial Times

did you know

Until the 1770s, humanity’s preferred way of erasing errant graphite marks relied on bread that had been de-crusted, moistened and balled up.

Parliamentary highlights

House of Commons

Oral questions
Defence (including Topical Questions)
General debate
Support for rugby league during the covid-19 outbreak – Yvette Cooper

House of Lords 

Oral questions
Private Notice Question
Conflict in Nagorno-Karabakh – Baroness Cox
United Kingdom Internal Market Bill – committee stage (day 3) – Lord Callanan

Scottish Parliament 

No business scheduled

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