Author: Mintel Group Ltd.
Last saved by: HTTP server

UK Retail Briefing - February 2008

ANALYST COMMENT
 WAS IT WORTH ALL THE EFFORT?
The case to answer
The recommendations:
Suppliers
Land Banks
Retailer approval
So – was there really a case to answer?
Where next?
THE MONTH IN UK RETAILING
 CLOTHING RETAILING
Baugur
…revamps fashion management team
…and causes row with Moss Bros bid
Elvi and Base Menswear enter administration
Kinnaird
…in talks to combine with Envy
…then gets Alexon unit for £1
Peacocks sees FY LFLs rise
Primark growth drives AB Foods sales
Whistles to be split off from Mosaic
 FOOTWEAR RETAILING
Stylo rescues Dolcis
Kurt Geiger sold for £95m
Shoe Zone acquires Stead & Simpson
 MULTI-SECTOR RETAILING
Alliance Boots toughens supplier terms
M&S
…to take food range to India?
…on track with Plan A
…in 800,000 voucher giveaway
 DEPARTMENT STORES
Beales reports weak FY figures
Debenhams
…quits Nectar scheme
…and launches Fairtrade menswear
John Lewis
…looks to India
…and trials ban on cheques
 DIY RETAILING
B&Q offers improved product range and service
Kingfisher’s Q4 sales hit by weak trading
OFT investigates HRG/Focus deal
 ELECTRICAL RETAILING
DSGi
…to conduct strategic review
…as UK offices raided in Intel inquiry
Kesa sells BUT for £410m
 CARPET RETAILING
Carpetright suffers from slowdown in Q3
 FURNITURE RETAILING
Land of Leather LFLs down 21.8% in Q2
 HOME SHOPPING
Amazon teams up with LoveFilm
Clare and Saatchi in online venture
Empire sold to Littlewoods
Ideal Shopping Direct receives bid approach
Ocado chases supplier deal that could result in float
Play.com beats Amazon to digital music store
Phones4U buys online rival
Supermarkets prepare for online price war
 BOOK AND STATIONERY RETAILING
Borders chief plans review
The Works crashes into administration
WH Smith LFLs down 2%
 SPORTS AND LEISURE GOODS RETAILING
JJB
…to support Nike’s takeover of Umbro
…and sells Soccer Domes
Sports Direct invests £20m in Chinese venture
 JEWELLERS
Signet reports FY sales slide
 TOYS AND GAMES RETAILING
Hamleys LFLs up 11.3% during Christmas
 MISCELLANEOUS SPECIALIST RETAILING
Halfords chief to join Coles, LFLs up 2%
EXECUTIVE APPOINTMENTS
Amazon appoints finance director
Bathstore appoints MD
Brighthouse appoints Plym
Downer back in charge at Borders
Egan leaves SSG
Former Vodafone head joins Woolworths board of directors
Garner leaves Selfridges
Handover to chair Alexon
Hudson to head Asda Living
Ilva appoints new UK head
Longworth to depart Asda
M&S appoints Russell for lingerie
MacKenzie leaves Co-op
Mamas and Papas appoints new MD
Marchpole appoints new chairman
N Brown appoints director to drive growth
Nesbitt joins TM Lewin
Netto boosts management
New brand comms head for John Lewis
New MD for Lloyds Pharmacy
Select co-founder quits as MD
Theo Fennell stepping down
Woolworths in management shake-up
PRODUCT DEVELOPMENT – BAKERY
 ASDA
 MARKS & SPENCER
 MORRISONS
 SAINSBURY’S
 SOMERFIELD
 TESCO
 WAITROSE
ADVERTISING NEWS
 NEW CAMPAIGNS
Costcutter launches its biggest-ever TV campaign
Holland & Barrett calls ad pitch
Louis Vuitton to debut TV ad
PC World to sponsor new Terminator show
Supermarkets to move away from celeb-heavy marketing
Tesco offers 30% off new car breakdown policies
Topps Tiles signs ITV ad deal
WH Smith appoints OMG
Woolworths becomes first major sponsor of Disney Channel
Yasmin Le Bon to front HoF campaign
 ACCOUNT GAINS/LOSSES
Asda hires Avenue A | Razorfish
Banana Republic hires PHD
H&B calls pitch
HoF reviewing ad/media accounts
Homebase calls account review
RETAIL ADVERTISING REVIEW
 ADVERTISING EXPENDITURE
Figure 1: Total advertising expenditure by all retail advertisers (£m), Dec 2003-Dec 2007
Figure 2: Total advertising expenditure by all advertisers (£m), Dec 2003-Dec 2007
Figure 3: Use of media by retail and all advertisers (%), Dec 2003-Dec 2007
Figure 4: Use of media by retail and all advertisers (£m), Dec 2003-Dec 2007
 TOP 25 RETAIL ADVERTISERS
Figure 5: Top 25 retailers by adspend (£), Nov 2007-Dec 2007
Food
Furniture
Variety and Electrical Retailers
DIY
Other
Nielsen Media Research/definitions
RETAIL SALES AND INFLATION
 RETAIL SALES
Office for National Statistics
Figure 6: Retail sales trends: Jan 2007-Jan 2008
Figure 7: Non seasonally adjusted % value change on previous year, Jan 2007-Jan 2008
Figure 8: Seasonally adjusted % volume change on previous year, Jan 2007-Jan 2008
Significant features of the latest ONS statistics
Confederation of British Industry
British Retail Consortium
 RETAIL PRICE INFLATION TRENDS
Figure 9: Annual percentage change in retail price index for selected product groups: Jan 2007-Jan 2008
Figure 10: Annual percentage change in retail price index for selected product groups: Jan 2007-Jan 2008
Retail Prices Index
Consumer Prices Index
British Retail Consortium: Shop Price Index
SECTOR ANALYSIS – FOOD AND DRINK RETAILING
 SALES TRENDS
Figure 11: Food and drink retailers, sales trends, 1997-2007
Figure 12: Food and drink retailers as % all retail sales, 1997-2007
 RETAIL PRICE INFLATION
Figure 13: Indices of retail prices for product categories (food & drink), Jan 2001-Jan 2008
 SALES BY SUB-SECTOR
Figure 14: Food and drink retailers: Breakdown of sales by sub-sector, 2000-07
 CONSUMER EXPENDITURE
Figure 15: Consumer expenditure on selected product categories (£m), 1999-2006
 FOOD & DRINK RETAILERS: LATEST TRENDS
Figure 16: UK: Leading food and drink retailers, 2006/07
Figure 17: UK food retailers top 20 market shares, 2006/07
Competition Commission
Tesco
Asda
Sainsbury’s
Morrisons
Others
SECTOR NEWS REVIEW: FOOD AND DRINK RETAILING
 SEPTEMBER
 BAKERS (RETAIL)
Thorntons profits on the rise
 CO-OPS (RETAIL)
Co-op
…launches ethical consultation
…as it reveals that food business was strong in H1
 GROCERS
Asda
…appoints former M&S director to run George
…as boss disagrees with Tesco’s green policies
Morrisons’ profits jump in H1
Sainsbury’s
…opens books to Delta Two
…before Delta Two enters talks with Sainsbury’s trustees
Supermarkets accused of milking customers by OFT
Tesco
…to launch Express in Hungary and Czech Republic
…as CC makes provisional ruling against Slough acquisition
…as Tesco plans to double Homeplus stores
…and pay farmers more for milk
…before launching car insurance comparison site
…and sustainable consumption institute
Waitrose to invest £800m in new stores
 OCTOBER
 BAKERS (RETAIL)
Greggs improves LFLs further in Q3
Thorntons posts solid start to the year
 CO-OPS (RETAIL)
Co-op to spend £200m on refits and rebranding
 GROCERS
Ocado
…targets expansion in the north
…as losses put flotation in doubt
Sainsbury’s
…to relocate HQ
…as board expected to back takeover bid
…while LFL sales growth slows in Q2
…before Delta Two’s bid hits problems
Tesco
…to take clothing online
…as sales growth slows down in H1
Waitrose
…MD attacks Tesco
…before feud escalates
 NOVEMBER
 GROCERS
Asda
…announces Christmas price cuts
…despite profits fall in 2006
…will co-operate with OFT in price-fixing inquiry
…to overhaul teenage-focused George
…and will take on Argos with online offer
Competition Commission publishes grocery inquiry provisional findings
London votes to ban plastic bags
Morrisons LFLs pick up during Q3
Sainsbury’s
…issues deadline; Delta seeks funding
…before bidder quits
…although Tchenguiz revives split plan
…as it posts strong H1 profit
 OFF-LICENCES
Strong H1 results for Majestic
Oddbins losses widen in 2006
 DECEMBER
 GROCERS
Grocers fined for dairy price fixing
Somerfield unveils expansion plans
Supermarkets judged in animal welfare league
Tesco
…boss unveils global sales target
…as it considers Czech Plus business
…then posts strong Q3 figures
…as it launches IT support service
 OFF-LICENCES
Threshers and Oddbins
…merger rumours emerge
…before they deny reports
 JANUARY
 BAKERS (RETAIL)
Greggs improves LFLs in H2
Thorntons continues steady improvement in Q2
 CO-OPS (RETAIL)
Co-op LFLs up 3.4% over Christmas
 GROCERS
Aldi reports “satisfactory” Christmas, strong full year
Asda has “best ever” Christmas
Morrisons LFLs surge by 9.5% over Christmas
Ocado to expand range with non-food
Sainsbury’s records 12th quarter of sales growth
Somerfield
…owners consider sale
…then posts good Christmas
Tesco
…posts ‘solid’ Christmas results
…targets Aldi and Lidl shoppers with price cuts
…and plans department store-style shops
Waitrose expands into UAE
 OFF-LICENCES
Majestic sales recover in December
 FEBRUARY
 BAKERS (RETAIL)
Thorntons’ sweetened by H1 profits
 CO-OPS (RETAIL)
Co-op
…working on a bid for Somerfield
…increases Fairtrade offer
 CONVENIENCE STORES
Sainsbury’s to sell 18 Bells Stores
 GROCERS
Asda
…plans online expansion
…as staff look to bonuses
…and unveils £400m expansion plans
…as chief gets tough with suppliers
…before limiting alcohol sales
CC recommends grocery ombudsman, planning changes
Morrison
…takes action against OFT
…and is granted judicial review
…then ramps up fight
Netto sales up 11% in 2007
Sainsbury’s
…considering Middle Eastern entry?
…offers GP appointments
…and plans to double non-food sales
Somerfield receives first-round bids?
Tesco
…slammed over £1.99 chicken
…and is accused of hypocrisy on cheap alcohol ban
…as it considers Express format for China
…while staff share £175 million
…and it unveils local produce strategy
…before Tchenguiz sells stake in joint venture
SECTOR ADVERTISING REVIEW – FOOD & DRINK RETAILING
 ADVERTISING EXPENDITURE
Figure 18: Total advertising expenditure by food & drink retailers, Dec 2003-Dec 2007
 USE OF MEDIA
Figure 19: Use of media by food & drink retailers and all retailers (%), June 2006 and June 2007
Figure 20: Use of media by food & drink retailers and all retailers (£), Dec 2006 and Dec 2007
 TOP TEN FOOD RETAIL ADVERTISERS
Figure 21: Top ten food & drink retailers by adspend, Dec 2006 and Dec 2007
 RETAILER FOCUS
Tesco
Figure 22: Tesco, media use by adspend and as share of total, Dec 2006-Dec 2007
Figure 23: Tesco, top brands by adspend, Dec 2007
Wm Morrison
Figure 24: Wm Morrison, media use by adspend and as share of total, Dec 2006-Dec 2007
Figure 25: Wm Morrison, top brands by adspend, Dec 2007
Sainsbury’s
Figure 26: Sainsbury’s, media use by adspend and as share of total, Dec 2006-Dec 2007
Figure 27: Sainsbury’s, top brands by adspend, Dec 2007
Asda
Figure 28: Asda, media use by adspend and as share of total, Dec 2006-Dec 2007
Figure 29: Asda, top brands by adspend, June 2007
Nielsen Media Research/definitions
REPORT FOCUS: OPTICIANS
Steady demand in a mature market
Figure 30: Market segmentation, 2007
Half of sales dominated by top five
Figure 31: Retailer shares (by value) of optical market, 2007
Independents have older profile
Differing business models
Outlet numbers broadly stable
NHS funding increasing
Celebs in specs
Ageing population should need more
Laser will become more commonplace
Consumers very positive about opticians
Research reveals reluctance
Sales edge ahead of inflation
Figure 32: UK market for optical goods and services, 2002-07
Goods and services sales
Figure 33: UK retail sales through opticians, by product and service type, 2002-07
Spectacles demand flat
Demand for contact lenses buoyant
Solutions have declined
Eyecare products small but growing
Eye examinations
Figure 34: UK retail sales of eye tests, 2002-07
 CONSUMERS: WHO, WHERE AND WHY
Longer-term view of retailers used
Figure 35: Purchase of contact lenses or spectacles in the last 12 months, by retailer, 2001-07
 TRENDS OF USAGE
Figure 36: Purchase of contact lenses or spectacles in the last 12 months, November 2005 and November 2007
Specsavers top of the game
Why Specsavers are best
Other multiples fight among themselves
Independent appeal
All the multiples attract more contact lens users
Figure 37: Type of eye correction used by where consumer have bought glasses or contacts in the last year, November 2007
Optician used by eye test frequency
Figure 38: When eyes were last tested by where consumer have bought glasses or contacts in the last year, November 2007
 PROFILES OF LEADING OPTICIANS
Specsavers
Background
Strategic evaluation
Financial performance
Figure 39: Specsavers: Total company turnover and UK estimated turnover, 2003-07
Store portfolio
Figure 40: Specsavers: Store numbers UK, International and total, 2003-07 and 2008
Retail offering
Vision Express (VE)
Background
Strategic evaluation
Financial performance
Figure 41: VE: Financial results, 2002-06
Store portfolio
Figure 42: VE: Store numbers UK, owned and franchises, 2002-07
Retail offering
Dollond & Aitchison (D&A)
Background
Strategic evaluation
Financial performance
Figure 43: D&A: Financial results, 2002-06
Store portfolio
Figure 44: D&A: Store numbers UK, owned and franchises, 2000-07
Retail offering
 INDUSTRY INSIGHTS
Glasses and contacts
Better service would help designer frames
Contact lenses under pressure from discounters
Specsavers attracts more new wearers
Laser correction
Laser expected to grow
Eternal youth
Some impact from laser
The supermarket opticians
Market consolidation
Concentration in the mid-market
The tax landscape
 THE FUTURE
Small growth in current terms, slight decline in real terms
Figure 45: UK market for optical goods and services, 2007-12
The market

This report is supplied in accordance with Mintel's terms and conditions.  
© Mintel Group Ltd.