Table of Contents
Analyst Comment – The Retail Sector in Turmoil
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- Failing retailers
- 2017 was not a bad year
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- Figure 1: Retail sales growth, 2017
- Failures – some common reasons
- Toys R Us – format redundant
- Maplin – who wants it?
- Conviviality – hubris
- Kleeneze – who?
- Furniture – Easy come, easy go
- Fashion – so much more demanding in the internet era
- Why Now – and what does it say about the high street?
- Online still the fastest growing element in retailing
- The multi-channel option – long term makes most sense
- Competition – so much more than stores vs online
- Rabbits in the headlights
- The siren call of diversification
- When will online peak? The example of booksellers
- Prospects for the high street
- Short term prospects 2018 and into 2019 – not too bad at all
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- Figure 2: Consumer confidence, Jan 2014- Feb 2018
UK Retail Sales
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- Key points
- Retail sales
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- Figure 3: Retail sales trends, 2017/18
- Figure 4: UK retail sales y/y growth, BRC vs ONS, 2016-2018
- John Lewis
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- Figure 5: John Lewis Department Stores: Year-on-Year Growth, 2016-2018
- Inflation
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- Figure 6: Annual percentage change in the consumer price index for selected product groups, 2017-18
- Inflation and wages
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- Figure 7: Real wages growth: Wages growth vs inflation, Jan 2014- Jan 2018
- Confidence
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- Figure 8: Mintel Financial confidence tracker, January 2015 – February 2018
- Looking forward
Sector Focus – Online Retailing
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- Online growth peaked in 2016
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- Figure 9: All online retail sales, annual growth by month, non-seasonally adjusted, Jan 2016 –Feb 2018
- Online share of sales peaks at Black Friday
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- Figure 10: Online share of all retail sales, monthly, Jan 2016-Feb 2018
- Share of online sales more equally split
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- Figure 11: Share of online sales, store-based vs. pureplay retailers, 2009-17
- Improved delivery options
- Amazon dominates online
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- Figure 12: Top ten online retailers, market shares, by value, 2015- 2016
- Amazons foray into fashion
Launch Activity and Innovations
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- UK: Co-op teams up with Live Nation for festival rollout
- UK: Dunelm trials DIY offering in-store
- UK: eBay introduces Shop the Celebrity Look image search
- UK: Sainsbury’s trials overhaul of Nectar loyalty scheme
Headlines for the Month
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- Food and Drink
- Clothing and footwear
- Home and household goods
- Online
- Other Retailing
- Economy
News Analysis – Food and Drink
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- UK: Aldi commits to making all own-label packaging sustainable by 2022
- UK: Bestway buys Bargain Booze as part of £7.25 million deal
- UK: Co-op
- … to change own-brand water to 50% recycled bottles
- … returns to profit as food sales rise in 2017
- UK: Conviviality
- … expected to appoint administrators
- … appoints administrators
- … files for administration
- … issues profit warning
- … sells wholesale arm to Magners cider owner
- UK: Marks & Spencer appoints CEO of Steinhoff UK to head up food business
- UK: Morrisons sales and profits rise in 2017
- UK: Ocado retail revenue rises in Q1
- UK: Sainsbury’s
- … reportedly looking at Mothercare takeover
- … to sell Tu clothing range on Argos with next day delivery
- UK: Simply Cook expands to supermarkets
- UK: Tesco expands plant-based range
News Analysis – Clothing and footwear
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- UK: Farfetch signs deal with Harvey Nichols ahead of IPO
- UK: French Connection
- … retail revenue falls
- … to sell Toast brand
- UK: H&M launches wedding range
- UK: Jigsaw seals £20 million rescue deal
- UK: Missguided to expand into the Middle East
- UK: Moss Bros
- … issues full year profit warning
- … profits fall due to stock shortage and poor December results
- UK: Mothercare
- … drafts in KPMG for restructuring as lenders agree to defer financial covenant testing
- … eyes CVA as a way to close stores
- UK: New Look creditors approve CVA plans to reduce rent and cut stores
- UK: Next sales and profits fall after “self-inflicting” errors
- UK: Select seeks CVA to cut store numbers and rent
- UK: Superdry co-founder steps down
- UK: Ted Baker bucks high street trend with sales and profits growth
- UK: Zara to introduce augmented reality on window display
- UK: JD Sports to acquire The Finish Line for $558 million
News Analysis – Home and Household Goods
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- Carpet retailing
- UK: Carpetright
- … considering CVA as part of turnaround plan
- … secures emergency loan as it considers CVA
- UK: ScS sales and profits gradually rise in H1
- DIY retailing
- UK: Bunnings UK seeks buyer as bankers are bought onboard
- UK: Screwfix new marketing campaign sees charity renovated
- UK: Topps Tiles sales edge up in challenging H1
- Electrical retailing
- UK: AO full year results to be in line with forecasts
- UK: GAME retail profit halves in H1
- UK: Grainger Games sees it suppliers credit limits cut
- UK: Maplin
- … job losses continue as administrators fail to find a buyer
- … sale looks unlikely as rivals look at stores
- Furniture retailing
- UK: DFS profits fall 58% in H1
- UK: Dreams profits and sales grow for fourth consecutive year
- UK: eve Sleep sales up 132% in 2017
- UK: Made appoints new CFO as it raises £40 million in equity funding
News Analysis – Online
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- UK: ASOS to launch own-brand homewares range
- UK: Ocado
- … retail revenue rises in Q1
- … reveals low food waste levels
- UK: Shop Direct adopts new technologies to improve customer experience
News Analysis – Other Retail
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- Book and stationery retailing
- UK: Card Factory profits down over 2017
- Department Stores
- UK: Debenhams partners with Swoon Editions
- UK: ‘Department store for kids’ coming to Liverpool
- UK: Harrods staff face sales commission cut of 25%
- UK: House of Fraser to receive £15 million funding from owner
- UK: Stacey Cartwright to leave Harvey Nichols
- Health & Beauty retailing
- UK: Superdrug
- … to release mini-documentaries for Pride 2018
- … to launch vegan pop-up shop
- Sports and Leisure
- UK: Halfords CFO leaves for Dixons Carphone
- Toys and Games Retailing
- UK: The Entertainer introduces Quiet Hour
- UK: Tiger founder to launch new kids and toys chain
- UK: Toys R Us to close all stores as it fails to find buyer
- Non-food discounters
- UK: Poundstretcher credit insurers cut cover
News Analysis – Economy
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- UK: Easter high street footfall declines as shopping centres and retail parks increase
- UK: February retail sales rise in value and volume
- UK: Food inflation falls to 12 month low
- UK: Government proposes plastic bottle and can deposit scheme
- UK: March retail sales up despite poor weather
- UK: Weather hits footfall in February
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