Non-essential retailers in England is set to open at the earliest on April 12th (stage 2) as part of UK’s 4-step roadmap to reopen the economy. This is a little later than hoped, with many retailers planning for pre-Easter (April 4th). However, it is close enough and we see little downside risk to forecasts. Easter is an important trading period for Kingfisher, the DIY players as well as Halfords, all of which can trade anyway as essential retailers. International Travel may resume from 17th May (stage 3) with the Government looking at how the isolation period could be shortened if arrivals pay for a private COVID test. Depending on other Governments’ travel restrictions, this may means summer holidays could be back on the agenda for some, which is positive for WH Smith. However, the cost of multiple private COVID tests could make international holidays unaffordable for many families and mean another staycation year. This would be positive for Halfords and UK retail generally. All limits on social contact may be removed from 21 June (Stage 4), which would mean the resumption of ‘normality’. The progressive lifting of restrictions on leisure activities starts from 12 April at the earliest, which will start to suck consumer expenditure back from retail into leisure, travel and experiences. Leisure typically accounts for c.22% of total consumer expenditure. This could quickly signal the end of the ‘super normal’ sales trends seen by the food, DIY and home exposed retailers in particular. News on the extension of furlough and the business rates holiday is likely from the Chancellor on Budget Day (3 March) and will definitely be welcomed. The rates holiday was due to finish at the end of March with furlough endingat the end of April. The Government has already announced it will respond to the consultation on potentially reforming business rates in the autumn, with talk of an online sales tax or even a warehouse tax being introduced. The Retail sector has been a vaccine beneficiary and as discussed in our note, Redrawing the landscape (15/12/2020), valuations are undemanding in our view, with forward earnings depressed by COVID. We see scope for upgrades in outer years and further re-rating. Whilst the macro backdrop is likely to deteriorate with rising unemployment and higher taxes, much of the quoted sector have sound balance sheets, with market share opportunities to go after as capacity exits, particularly in mid-market clothing and home. Retail sector always tends to favour stock-picking. We see M&S, Card Factory, Halfords, Greggs, WH Smith and Marshall Motors as excellent value/recovery Buys. We also believe the best way to make money in Retail is via roll-out stories as they are less reliant on the underlying consumer. We continue to like JD Sports, B&M, Watches of Switzerland and the online retailers. Our Sell recommendations are Kingfisher and Superdry.