UK Retail Briefing - February 2012

ANALYST COMMENT
 MATCHING PRICES
The problem of being the leader
Who isn’t matching Tesco these days?
Taking price out of the equation
What can Tesco do?
HEADLINES FOR THE MONTH
Grocers
Clothing
Footwear
Multi-sector retailing
Mixed goods
Miscellaneous specialists
Department stores
Electricals retailing
Music, video, and games retailing
Furniture retailing
Home shopping
Health and beauty retailing
Books and stationery retailing
Sports and leisure goods retailing
Jewellery
Toys and games retailing
RETAIL SALES – BACKGROUND AND OUTLOOK
Key points
Retail sales trends
Figure 1: Retail sales trends, 2011-12
The BRC data for January
Figure 2: UK retail sales y/y growth, BRC vs ONS, 2010-11
John Lewis
Figure 3: John Lewis: Year-on-year growth, 2010-12
Inflation and wages
Figure 4: RPI vs Average weekly earnings growth, 2008-12
Inflation fell again
Figure 5: Annual percentage change in the Consumer Price Index for selected product groups, 2011-12
Looking forward
SECTOR FOCUS – FOOD RETAILERS
 MINTEL’S TRACKER SURVEY
Figure 6: Mintel Tracker Survey extracts: Agreement with statements on grocery shopping, Dec 2009, Dec 2010, Dec 2011
 SECTOR RELATIVES
Figure 7: Food retailers’ sales as % of all retail sales (excl. fuel), 2006 -11
 RETAIL SALES DATA
Figure 8: Food retailers’ sales, 2006-11
Figure 9: Food retailers’ real-terms year-on-year sales growth, 2006-11
 INFLATION
Figure 10: Consumer prices inflation, selected categories, Jan 2010-Dec 2011
Figure 11: Year-on-year change in food commodity prices, Jan 2011-Jan 2012
 CONSUMER EXPENDITURE
 LEADING RETAILERS
Christmas performances
What to do with a problem like Tesco?
What do these results tell us?
Figure 13: Leading food retailers, 2010/11
NEWS ANALYSIS
 GROCERS
Asda
…outperforms rivals over Christmas
…to invest £500m in stores and supply chain
Booths sales up as shoppers entertain over Christmas
Iceland deadline nears as Walker lines up £150m
Morrisons
…acquires meat processing facility
…brings back pay day offers
New People's Supermarket to open in Hackney
Sainsbury's
…launches Matthew Williamson designer shopper
…sees 'record-breaking' Christmas
Tesco
…aims to regain sales through voucher campaign
…considers closing Home Plus stores
…enters F&F partnership in Saudi Arabia
…expands international technology for F&F
…reports "disappointing" Christmas with like-for-likes falling 2.2%
…to drop carbon reduction logo
The Co-operative
…adds 28 stores after acquiring David Sands
…posts Christmas sales uplift
Ugo discount grocer sold after just a year
Waitrose
…and Boots scale back partnership
…to introduce contactless payments
…to open more convenience stores in London
 FOOD SPECIALISTS
Greggs reports boosted Christmas sales
Hotel Chocolat considering launch of beauty products
Thorntons suffers poor Christmas performance
 OFF-LICENCES
Majestic Wine posts Christmas sales rise
 CLOTHING RETAILING
Agent Provocateur like-for-like sales rise over Christmas
Bestseller appoints UK sales reps to drive wholesale
Blue Inc enjoys positive Christmas
Bonmarche
…appoints GA to manage store closures
…bought out of pre-pack by Sun European
…stores to close as part of rescue deal
Bravissimo performance driven by Pepperberry
Burberry reports rising sales due to outerwear and leather goods
Coach posts rise in second quarter profits
Edinburgh Woollen Mill
…bids for Peacocks
…plans 150 new stores as it eyes Peacocks property
…pulls out of Peacocks talks
French Connection issues profit warning
Howies bought back by management
Jaeger full year profits fall
Karen Millen to launch sites in more European countries
La Senza acquired by Alshaya UK
Madhouse bought in pre-pack deal
Matalan reports sales growth
McArthurGlen reports record trading in December
Mulberry reports strong like-for-likes over Christmas
New Look
…considers closing 100 stores
…reports strong Christmas trading
Peacocks
…receives six bids from potential buyers
…refuses to honour gift vouchers
…sale sees new surprise bidder
…struggles as RBS pulls out of rescue deal
Primark sees strong Christmas trading
Pumpkin Patch in administration
Select to double stores
SuperGroup
…Christmas sales rise
…reports January sales slowdown
Ted Baker delivers "excellent" Christmas performance
Topman overseas success encouraging
White Stuff reports 2% year-on-year rise
 FOOTWEAR RETAILING
Barratts stores acquired by Ziff
Dolcis bought out of administration
Dr Martens up for sale
Office
…reports strong Christmas
…to revamp website and launch overseas
 MULTI-SECTOR RETAILING
Marks & Spencer reports stronger food sales while general merchandise suffers
 MIXED GOODS RETAILERS
99p Stores looks to sell business for £60m
Poundland like-for-like sales up 5.9%
Poundstretcher
…closes transactional website
…quick to acquire up to 20 Ugo stores
Argos
…cuts or freezes 11,000 prices
…like-for-likes fall 8.8%
The Original Factory Shop reports growth
 MISCELLANEOUS SPECIALISTS
Evans Cycles revenues rise but profits fall
Garden Centre Group in exclusivity talks with Terra Firma
Halfords sees like-for-likes drop of 4.8%
LS Travel adds Watermark Bookstore to rail portfolio
Mothercare
…reconsiders UK stores after arrival of new boss
…sales rise driven by promotions
…to launch range with Jools Oliver
Past Times
…closes 47 stores
…officially in administration
Pets at Home reports like-for-like sales growth over Christmas
QD reports solid Christmas and plans expansion
Snappy Snaps sales rise 6.7% over Christmas
Woolworths stores almost filled
 DEPARTMENT STORES
Debenhams has strong Christmas
Fortnum & Mason reports record sales
Harvey Nichols launches new concept store in Liverpool One
House of Fraser
…posts "pleasing" sales growth
…to extend collaboration with Mary Portas
John Lewis
…launches trend-led women's label JL Weekend
…Partnership sales up 10%
…sales driven by Clearance
 DIY RETAILING
B&Q invests £12m in product ranges
Carpetright
…Ireland business in recovery despite group profit warning
…issues profit warning
Topps Tiles sales down 4.2% in first quarter
 ELECTRICALS RETAILING
Carphone Warehouse reports 4.7% like-for-like rise
Comet
…acquisition by OpCapita complete
…cuts staff by 450
…reports weak Christmas trading
Dixons
…boss Browett exits for Apple
…launches Knowhow Movies
…reports falling like-for-likes over Christmas
Maplin reports strong December
Phones 4U reports sales rise in final quarter
 MUSIC, VIDEO, AND GAMES RETAILING
Game Group
…granted breathing space from banks
…like-for-likes fall as margins hit
…marketing boss exits as 46 jobs put at risk
…sets Friday deadline for first round bids for overseas business
…to offload overseas operations
GameStop closes stores in Northern Ireland
HMV gets breathing space
 FURNITURE RETAILING
Dunelm growth continues in strong H1
Furniture Village sales rise but profit falls
Ikea's profit rises 10.3%
Lakeland launches new best practice mobile optimised website
 HOME SHOPPING
Amazon
…beats HMV to top UK entertainment retailer place
…expands sporting range for Olympics
…eyes chilled food offensive
Asos sales and margins up
Boohoo full-year profits grow
Feelunique.com increases overseas marketing
Flying Brands reports sales fall
Kiddicare acquires 10 former Best Buy stores
My-Wardrobe plans international launch
N Brown reports like-for-likes rise 2%
Ocado
…enjoys late surge in Christmas sales
…plans 'aggressive' marketing push
…pre-tax losses improve
…to cut prices in online price war
Shop Direct chief Newton-Jones to leave
The Hut reports record sales
 HEALTH AND BEAUTY RETAILING
Boots sees sales rise more than 3% in December
Lush Christmas "exceeds expectations"
Superdrug delivers "solid" festive growth
 BOOK AND STATIONERY RETAILING
Foyles reports Christmas sales up 20%
Hallmark plans out international expansion
Ryman profits driven by ecommerce
The Works reports strong Christmas performance and new CEO
WHSmith reports like-for-likes fall 5%
 SPORTS AND LEISURE GOODS RETAILING
Blacks set to be back in the black within a year
Decathlon eyes Best Buy stores
JD Sports
…formally acquires Blacks
…posts festive like-for-likes rise
 JEWELLERS
Folli Follie enjoys 64% increase in sales over Christmas
LVMH considers bid for Aurum
Signet UK sales rise 1.8% over Christmas
 TOYS AND GAMES RETAILING
Hamleys posts record sales
Hawkins Bazaar
…bought forward by former owner Primary Capital
…close to finding buyer as further stores shut
Hornby sale hit by weak Christmas trading
The Entertainer outperforms toy market by 22.1%
 ECONOMY
BRC: Stronger Christmas "reflects one-off factors"
Cost of retail crime rises 31%
CPI at 4.2% in December
Glasgow Buchanan Street now 91% let
Government launches Portas pilot to revive high street
January retail like-for-like sales fall
Kantar:
…reveals Sainsbury's market share highest since March 2003
…Tesco market share falls
Meadowhall applies for 70,000 sq ft extension
More shoppers do Christmas shopping via smartphone
ONS: Retailers see December sales rise
Retail employment rises 0.5% but weak outlook remains
Scottish retail sales worst since at least 1999
Shop price inflation
…fall to near-two year low
…hits 16-month low in December
Vacancy rates highlight north-south divide
Weekly spending power falls by £12