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UK Retail Briefing - February 2011

ANALYST COMMENT
The Internet and the High street
Problems at HMV
Credit insurance
Poor trading
The internet has all the advantages
Lessons for other sectors
Where next
So why all the interest in buying the HMV business?
Retailing is a constantly changing business
HEADLINES FOR THE MONTH
Grocers
Food specialists
Clothing retailers
Footwear
Multi-sector retailing
Miscellaneous specialists
Department stores
Mixed goods retailers
DIY
Electricals
Music and video
Home shopping
Health and beauty
Books and stationery
Sports and leisure goods
Jewellers
Toys and games
Economy
RETAIL SALES – BACKGROUND AND OUTLOOK
Retail sales trends
Figure 1: Retail sales trends, 2010
BRC and Christmas trade
Figure 2: UK retail sales y/y growth, BRC vs ONS, 2009-2011
John Lewis
Figure 3: John Lewis: Year-on-year growth, 2009-11
Inflation and wages
Figure 4: RPI vs Average weekly earnings growth, 2008-11
Inflation remains uncomfortably high
Figure 5: Annual percentage change in the Consumer Price Index for selected product groups, 2010-11
The pattern of retail sales growth in early 2011
Looking forward
SECTOR FOCUS – FOOD RETAILERS
 RETAIL SALES TRENDS
Figure 6: Food retailers, sales trends, 2006-10
Figure 7: Food retailers’ sales as % of all retail sales, 2005-10
Subsectors
Figure 8: Breakdown of Food retailers’ sales, by sub-sector, 2006-2010
 CONSUMER PRICES INFLATION
Figure 9: Indices of retail prices for key product categories, 2006-10
 CONSUMER EXPENDITURE
Figure 10: Consumer expenditure on selected product categories, 2005-09
Figure 11: Consumer expenditure on selected product categories, Q1-3 2009 – Q1-3 2010
Leading food retailers
Figure 13: Food Retailers: Leading retailers’ share of food retailers’ sales, 2009/10
Figure 8: Estimated non-retail share of sales, 2009/10
NEWS ANALYSIS
 GROCERS
Asda Income Tracker: average family's spending power falls
Asda sells 39 Netto stores as part of OFT disposal deal
M&S appoints Tesco's Laura Wade-Gery
Morrisons
…in talks with George Davies
…retail boss to step down
…sees like-for-likes up 1%
…to complain about Asda's ads
Nisa Today’s Group
…reports strong Christmas trading figures
…reports double digit growth
Sainsbury's
…abandons plans to move headquarters to King's Cross
…appoints non-exec from Google
…market share up, but Morrisons' falls
…opens Fresh Kitchen
…reports Christmas high
…to source all Fairtrade cotton from supplier in India
Tesco
…completes sale and leaseback of 21 shops
…launches 20% off sale
…launches daily dozen price campaign
…reports slight Christmas growth
…to open new DC for dotcom and Express
The Co-op
…appoints Gill Bar as marketing director
…sales fall due to bad weather
…to create 1,700 store management jobs
Waitrose
…reaches £5bn sales
…to introduce 'Little' stores
 FOOD SPECIALISTS
Thorntons' sales fall in cold weather
 CLOTHING RETAILING
Alexon sales up but issues profit warning
Aquascutum narrows losses
Aurora to outsource distribution and IT functions
Bestseller increases Asos stake to over 20%
Burberry
…launches evolving spring ad campaign
…to move into Regent Street Habitat store
French Connection
…opens Facebook store
…pre-tax profits expected to rise
H&M to launch sustainable clothing range
Hermes increases forecast for 2010
Hobbs secures £14m investment
Jack Wills to expand further overseas
Jacques Vert festive sales rise
Matalan Christmas like-for-likes decline 4.5%
Moss Bros sells Hugo Boss franchise for £16.5m
Mulberry Christmas like-for-likes up 70%
New Look sales fall over Christmas
Peacocks Group sales and profits rise
Phase Eight potentially bought out by private equity firm
Primark Christmas sales up
Reiss on track for 40% sales rise
Republic gains Andy Bond as new chairman
SuperGroup
…buys European franchisee to push international growth
…Christmas sales rise
…sees strong third quarter sales
Ted Baker sales rise 7.6%
Topshop plans to 'double' sales
 FOOTWEAR RETAILING
Barratts Priceless posts £6.1m profit
Dune creates IT platform for expansion plans
Jimmy Choo backers opt for sale
Jones Bootmaker in £40m sale
 MULTI-SECTOR RETAILING
Marks & Spencer to open store in Champs-Elysees
Home Retail reports better than expected Christmas
Marks & Spencer
…appoints Tesco's Laura Wade-Gery
…posts 2.8% Christmas like-for-like rise
…to focus on clothing arm
…top mCommerce league
 MIXED GOODS RETAILING
Argos to partner with PayPal
Poundworld to roll out multi-price store format
The Original Factory Shop reports Christmas like-for-likes up 5%
 MISCELLANEOUS SPECIALISTS
Halfords' retail sales drop over Christmas
Kiddicare plans to repeat business
Pets Corner profits up as it plans expansion
Laura Ashley FY profits to be "significantly higher" than expected
Bathstore receive bids from Change Capital
Carpetright sales fall and it warns on profits
Cath Kidston sales rise 52%
Dunelm Christmas like-for-likes fall
 DEPARTMENT STORES
Beales narrows losses by a third
Debenhams like-for-likes slow
Fortnum & Mason reports record Christmas
Harrods breaks £1bn sales mark
House of Fraser
…appoints director of ecommerce
…lose Landsbanki stake
…sees strong Christmas trading
John Lewis
…appoints new buying director
…sees continuing strong trade
…sees weekly sales fall
…to open in-store spas
Selfridges finalises de Bijenkorf deal
 DIY RETAILING
Kingfisher's trade chain Screwfix opens to public
Topps Tiles' Christmas sales up
 ELECTRICAL RETAILING
Best Buy Europe sees two more senior departures
Best Buy UK online boss to leave
Carphone Warehouse sees like-for-likes rise over Christmas
Comet
…begins redundancy consultations as it consolidates service centres
…directors leave after dire trading
…like-for-likes down 7.3%
Dixons sees sales suffer in snow
Everything Everywhere to test stores under own name
Jessops Christmas like-for-likes up 3%
O2 Retail to close 40 stores in 2011
 MUSIC AND VIDEO GOODS RETAILING
HMV
…appoints KPMG amid bank concerns
…begins to close stores
…sees buyers circling
…suppliers hit by credit insurance cut
Music Sales: 98% of singles now purchased online
 FURNITURE RETAILING
Habitat to exit Regent Street
Homestyle profits down but Reid acquisition boosts turnover
The Conran Shop sales rise over pre-VAT period
 HOME SHOPPING
Amazon
…acquires LoveFilm
…boosts fashion offer with lingerie launch
Asos sales up 59%
Ebay reports strong Christmas due to fashion division
Figleaves.com expands delivery options and drop boxes
Flying Brands warns on profits
Ideal Shopping Direct improves 2010 sales
M and M Direct sees sales rise
N Brown
…acquires Slimma and Splendour
…sees Christmas sales up
Ocado
…ends year with strong Christmas trading sales
…reports profit and reduces full year losses
…shares rise as bid speculation increases
Shop Direct Christmas sales up 5%
The Hut sales up 70% in 2010
 HEALTH AND BEAUTY RETAILING
Boots UK like-for-likes up in December
Feelunique.com sales up 50% over Christmas
Holland & Barrett like-for-likes up 2.3% in December
Superdrug like-for-likes up 1.7% over Christmas
The Perfume Shop Christmas like-for-likes up 2%
 BOOK AND STATIONERY RETAILING
British Bookshops & Stationers
…axes 40 staff
…becomes first retail casualty of 2011
Foyles to open first shop outside London in 70 years
Office Depot ties up with Dixons for PC World shop-in-shops
The Book Depository sees strong first half
Waterstone's to close 11 shops on Sunday
WH Smith
…like-for-likes fall 5%
…buys 22 British Bookshops & Stationers shops
 SPORTS AND LEISURE GOODS RETAILING
JD Sports acquires Champion Sports
Blacks
…sale talks break down
…sees two bidders remain
Go Outdoors reveals record year
JD Sports
…considers buying JJB
…invests £1m in Kukri purchase
Kitbag sales rise to record over Christmas
Snow + Rock appoints Neil McCausland as non-exec chairman
 JEWELLERS
Aurum reports 'outstanding' Christmas
HPJ Jewellers bought out of administration
Signet UK sales fall over Christmas
 TOYS AND GAMES RETAILING
Game
…like-for-likes improve over Christmas
…signs deal with Microsoft to sell downloads in store
Games Workshop sees sales fall
Hamleys
…potentially bought by Qataris
…up for sale
 ECONOMY
BRC
…reports retail like-for-likes up 2.3% in January
…reports retail sector like-for-likes fell 0.3% in December
Consumer confidence rises in fourth quarter
Consumer price inflation rises to 3.7% in December
ONS show strong retail sales for December 2010
Scottish Q4 retail sales outgrow rest of Europe
Shop price inflation rises to 2.5%

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