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UK Retail Briefing - August 2009

ANALYST’S COMMENT
 THE MAN (OR WOMAN) AT THE TOP
A shining example
The importance of leadership
And who got it right?
HEADLINES FOR THE MONTH
Food retailing
Clothing
Mixed goods
DIY
Homewares
Health and beauty
Miscellaneous
RETAIL SALES – BACKGROUND AND OUTLOOK
Retail sales trends
Figure 1: Retail sales trends, 2008-09
Fed up with austerity?
Early indications for July
Figure 2: UK retail sales y/y growth, BRC vs ONS, 2007/09
Figure 3: John Lewis: Year-on-year growth, 2008-09
Inflation and wages
Figure 4: RPI vs Wage rate growth, 2007-09
The RPI at the bottom
Figure 5: Sterling - Euro exchange rate, June 08-Aug 09
Figure 6: Sterling – US Dollar exchange rate, June 08-Aug 09
Figure 7: Annual percentage change in Retail Price Index for selected product groups, 2008-09
Looking forward
SECTOR FOCUS – FOOD RETAILERS
 SALES TRENDS
Figure 8: Food retailers, sales trends, 1998-2008
Figure 9: Food retailers as % of all retail sales, 1998-2009
Subsectors
Figure 10: Breakdown of Food retailers’ sales, by sub-sector, 2004-08
Figure 11: Food retailers: Subsector performance H1 2009 vs H1 2008
 RETAIL PRICE INFLATION
Figure 12: Indices of retail prices for key product categories, 2005-09
 CONSUMER EXPENDITURE
Figure 13: Consumer expenditure on selected product categories, 2004-08
Figure 14: Food retailers sales relative to all spending on food and drink, 2000-08
 FOOD RETAILERS
Figure 15: Food Retailers: Leading retailers’ share of food retailers’ sales, 2008/09
ADVERTISING NEWS
 NEW CAMPAIGNS
Co-op starts £18 million advertising review
 ACCOUNTS GAINS AND LOSSES
B&Q £40m account handed to McCann Erickson
Clarks hires MPG to handle £12 million media business
H&M signs up with Clear Channel
Littlewoods appoint Leo Burnett to £12 million creative account
EXECUTIVE APPOINTMENTS
Former MFI and Woolworths chiefs appointed to Allied Carpets
Wheway appointed as new Best Buy Europe chief
Primark founder stands down as MD
Thorntons appoints Robson as new finance director
ADVERTISING EXPENDITURE
Figure 16: Total advertising expenditure, by all advertisers (£m), May 2005-May 2009
Figure 17: Total advertising expenditure, by all retail advertisers (£m), May 2005-May 2009
 USE OF MEDIA
Figure 18: Use of media, by retail and all advertisers (£m), May 2008-May 2009
Figure 19: Use of media, by retail and all advertisers (%), May 2008-May 2009
 TOP 25 RETAIL ADVERTISERS
Figure 20: Top 25 retailers, by adspend (£), Apr 2009-May 2009
THE MONTH IN UK RETAILING
 BAKERS (RETAIL)
Thorntons
…H2 sales up 6.6%
…plans overseas expansion
 GROCERS
Asda
…to trial refill-stations to reduce packaging
…to launch social networking site
Morrisons raises profit forecast
Ocado close to completing £40 million fund-raising
Sainsbury's
…launches online non-food service
…announces Scottish expansion plans
Tesco plans further banking assault
Waitrose
…eyes Scottish expansion
…in talks to integrate Duchy Originals
…to sell John Lewis homewares
 OTHER FOOD SPECIALISTS
Holland & Barrett gets green light for Julian Graves merger
 CLOTHING RETAILING
Burberry posts 8% revenue boost
Jaeger announces Hong Kong entry
Mackays sees profit fall
Moss Bros reveals bullish expansion plans
New Look to buy five Borders UK stores
River Island posts records results
Ted Baker launches Born
Next posts sales improvement
 MIXED GOODS RETAILING
Argos to counter weak pound with 5% price hike
Mothercare enjoys sales surge
 DIY RETAILING
Focus
…faces tough business review
…set to unveil CVA
Kingfisher
…buoyed by B&Q results
…mulls franchise move to broaden horizons
Topps Tiles posts LFLs fall
Travis Perkins posts H1 profit dip
 ELECTRICALS RETAILING
Currys opens in "death store"
 CARPET RETAILING
Allied Carpets falls into administration
Carpetright
…in talks to buy Allied's insurance division
…LFLs rise 1.4%
 HOMEWARES RETAILING
Dunelm sees LFLs climb 5%
 HOME SHOPPING
Flying Brands performance improves
 HEALTH AND BEAUTY RETAILING
Superdrug records FY loss
 BOOKS AND STATIONERY RETAILING
Borders
…enters sale talks with Hilco
…auditors raise doubts over future
 SPORTS AND LEISURE GOODS RETAILING
Blacks Leisure
…posts LFLs drop
…secures funding for a further year
JD Sports acquires Canterbury Europe for £6.5 million
JJB threatens legal action against Ashley
Sports Direct
…suffers 91% profit plunge
…store purchase faces probe
 JEWELLERS
Signet suffers Q2 LFLs drop
 GARDEN CENTRES
Dobbies aims to rent out allotments
Garden Centre Group LFLs grow in H1
 TOYS AND GAMES RETAILING
Game agrees £175 million refinancing
 MISCELLANEOUS SPECIALIST RETAILING
Halfords posts quarterly sales rise

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