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UK Retail Briefing - September 2017

ANALYST COMMENT - IT’LL BE A ROCKY RIDE FOR RETAILERS THIS CHRISTMAS
Real incomes are falling
Figure 1: Real incomes: earnings growth and inflation, 2014-17
And retail sales are under pressure as well.
Figure 2: Retail sales growth 2014-17
Inflation rising
Figure 3: Retail sales growth, volume and value data 2014-17
Borrowing to spend
Figure 4: Savings ratio, 2014-17
Consumer confidence weakening
Figure 5: How people feel about their finances, 2014-17
Figure 6: Proportion of consumers who have added to their savings in the last three months, 2015-17
Black Friday
Putting the evidence together
What we forecast
What ought to happen and what probably will.
RETAIL SALES
 KEY POINTS
Retail sales
Figure 7: Retail sales trends, 2016/17
Figure 8: UK retail sales y/y growth, BRC vs ONS, Jul 2015-Aug 2017
John Lewis
Figure 9: John Lewis: Year-on-Year Growth, Aug 2016-Aug 2017
Rising inflation
Figure 10: Annual percentage change in the consumer price index for selected product groups, 2016-17
Inflation and wages
Figure 11: Real wages growth: Wages growth vs inflation, 2014-17
Confidence
Figure 12: Mintel confidence tracker, current financial situation and situation compared to one year earlier, Jan 2014-Aug 17
Looking forward
SECTOR FOCUS – DIY RETAILING
Major changes
Consumer spending
Figure 13: Spending on DIY products as % all consumer spending, 2000-16
Retail sales
Figure 14: DIY specialists sales as % all retail sales, 2000-16
Figure 15: DIY specialists sales growth, 2016-17
Housing market
Figure 16: Proportion of households renting their home, 2001-16
Figure 17: Housing completions, Feb 2016-Jul 2017
Leading retailers
Kingfisher
Bunnings
Wickes
Where next?
LAUNCH ACTIVITY AND INNOVATION
Lush accepts bitcoin as payment
ASOS launches male make-up
Marks & Spencer trialling sushi counters in store in partnership with Wasabi
UK: Oasis launches in-store virtual reality campaign
UK: Sainsbury’s trials 30 minute click and collect
HEADLINES FOR THE MONTH
Grocers
Clothing retailing
Multi-sector retailing
Department stores
DIY retailing
Electrical retailing
Homewares retailing
Home shopping
Sports and leisure goods retailing
NEWS ANALYSIS – FOOD AND DRINK
 CONVENIENCE STORES
UK: McColl’s sales rise in Q3
UK: Nisa in talks with Co-op after Sainsbury’s delays takeover deal
 GROCERS
UK: Aldi launches cut-price gluten free range
UK: Asda
…cuts almost 300 jobs in cost-saving drive
…returns to sales growth after three years of decline
UK: Morrisons focuses on British food
UK: Sainsbury’s
…announces instore Argos click-and-collect service
…teams up with NFL
…trials 30 minute click and collect
UK: Tesco
…rolls out vegetables for children
…to sell mini avocados in bid to fight food waste
NEWS ANALYSIS – CLOTHING AND FOOTWEAR
 CLOTHING RETAILING
Arcadia Group pays £35m to BHS creditors
Basler UK enters administration
Jack Wills hires new chief marketing officer
Lipsy to close website
M&Co to open 75 new stores
New Look
…chief executive to step down
…teams up with London Fashion Week
…debt draws US investors
Officine Générale to open debut UK store
Reserved opens debut store in London
TJX reports favourable Q2
Topshop and Topman creative directors replaced
Urban Revivo hires Topshop’s former buyer for UK launch
Zara opens UK baby wear store
Jimmy Choo experiences strong growth in first half of the year
Jones Bootmaker has closed nine stores
NEWS ANALYSIS – MULTI-SECTOR 
Halfords sees retail sales rise
M&S
…to distribute non-food surplus to charity scheme
…to offload Hong Kong and Macau franchises
…trials children’s footwear advice service
Wilko to cut 3,900 jobs
 DEPARTMENT STORES
Debenhams group trading director steps down
House of Fraser
…HQ cuts online jobs
…opens new sustainable store
John Lewis
…to allow customers to sleep overnight
…to launch tradesman service
NEWS ANALYSIS – HOUSEHOLD GOODS
B&Q sees a fall in sales in Q2
Bunnings sales rise whilst profits fall in debut UK year
Wickes reports positive 2016
 ELECTRICAL RETAILING
Dixons Carphone revenue rises
 FURNITURE RETAILING
DFS struggles in second half of 2017
 HOMEWARES RETAILING
Cath Kidston collaborates with Pinterest
Chief executive of Dunelm steps down
Laura Ashley sales and profits tumble
Sonder Living expands into the UK
NEWS ANALYSIS – HOME SHOPPING
Avenue 32 confirms closure
BHS.com sees sales jump in Q2
Boden reported an increase in sales and profit
Boohoo appoints non-executive director
Feelunique sales grow in annual results
Gear4music posts positive half year result
Matchesfashion.com
…to be sold for £600 million
…sold to Apax Partners
Missguided launching standalone menswear website
Mr Porter opens ‘Kingsman: The Golden Circle’ shop
Notonthehighstreet.com chief executive leaves
The Hut Group
…acquires Australian beauty retailer
…adds to beauty offering with Glossybox acquisition
…to acquire Espa
Very Exclusive hires former Avenue 32 buying director
 HEALTH & BEAUTY RETAILING
The Fragrance Shop profit increases
The Perfume Shop launches mobile store
 BOOK AND STATIONERY RETAILING
Card Factory sales rise
Typo and Smiggle increase footprint in the UK
WH Smith expects full year results to be in line with expectations
 SPORTS AND LEISURE GOODS RETAILING
Sports Direct
…increase stake in Debenhams
…issues confident trading update
 TOYS AND GAMES RETAILING
Toys R Us profits surge whilst sales fall
GAME
…and Maplin to launch partnership stores
…sales up due to growth in Spanish market
NEWS ANALYSIS – ECONOMY
British Retail Consortium
…footfall for July decreases
…non-food deflation reaches four year low
…retail sales hold up in August
ONS data shows a weak July

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