UK Retail Briefing - July 2005

ANALYST COMMENT
 EXAMINING THE RUNES
Mixed signals
High street gloom
Cautious consumers
Terrorism
Tough second half
THE MONTH IN UK RETAILING
 BAKERS (RETAIL)
Thorntons pushes forward
 GROCERS
Asda
…offers cut-price electricals
…and launches George cosmetics range
…before wielding the axe…
…and recruiting shop floor staff in refocusing drive
Sainsbury’s
…opens door to Asda staff
…and posts growth
…as its turnaround gathers pace
Somerfield
…left with two suitors as Co-op quits
…but Baugur boss charged with fraud
…and Baugur too drops out
…and offloads its stake
…leaving Somerfield flat
Tesco
…posts impressive results
…and moves into contact lenses
Whittard receives takeover approaches
 MULTI-SECTOR RETAILING
GUS boosted by new stores
Boots
…boosted by healthcare
…as it looks to concessions
…with Superdrug bidding to fill space
HMV
…sees sales push forward
…as it KOs VHS
…and sets up shop in Guernsey
John Lewis in Oxford Street revamp
Laura Ashley closes flagship store
Littlewoods
…poised for rebrand
…before stores are snapped up by ABF
M&S
…slide continues
…while Rose ramps up responsibility
 DEPARTMENT STORES
Beales results remain static
House of Fraser
…in talks to buy James Beattie
…and agrees on acquisition
…but Debenhams considers late bid
Meanwhile…
Debenhams loses landmark case
 DIY RETAILING
Sales fall at Wickes
 ELECTRICAL RETAILING
Kesa reports H1 hike
Dixons
…looks to women
…but results disappoint in H2
 CARPET RETAILING
Carpetright in defiant mood
 FURNITURE RETAILING
Ikea to hit the high street
Land of Leather poised for flotation
MFI begins ascent from the depths?
 HOME SHOPPING
Sales rocket at high-flying Asos
Kleeneze rebrands and builds healthy platform
 HEALTH AND BEAUTY RETAILING
Superdrug moves into jewellery
Molton Brown sold to Kao
Body Shop continues to tone financials
 BOOK AND STATIONERY RETAILING
Harmful environment hits Clinton Cards
Ottakar’s writes subdued first chapter
 SPORTS AND LEISURE GOODS RETAILING
Blacks falters as sales dip
JJB chairman steps down as sales slide
John David Group see half time slip
 GARDEN CENTRES
Dobbies sows seeds for year
Wyevale upbeat as chief steps down
 TOYS AND GAMES RETAILING
Game hit by tough environment
 MISCELLANEOUS SPECIALIST RETAILING
Halfords still riding high
EXECUTIVE APPOINTMENTS
Morrisons’ Jones gets way with non-execs
TK Maxx appoints marketing strategy chief
B&Q marketing director to leave at end of 2005
Dobbies appoints retail director
Land of Leather goes for Matthews
Keenan rewarded with Currys role
Miss Selfridge buyer joins MK One
Carphone appoints trading director
Savers gets new MD
JJB chairman steps down as sales slide
Asda
…director steps down
…while Norman denies Morrisons rumours
Homestyle makes executive play
Rose loses right hand man
Fortnum boosts management team
Dixons director joins Travis Perkins
PRODUCT DEVELOPMENT – NON-ALCOHOLIC BEVERAGES
 ASDA
 SAINSBURY’S
 MARKS & SPENCER
 ALDI
 BOOTS
ADVERTISING NEWS
 NEW CAMPAIGNS
PC World backs Thomson promotion
Harrods campaign celebrates Britishness
Ikea to sponsor AA atlases
Sainsbury’s
…links up with Lottery for promotion
…and touts strawberries as the new asparagus
Ted Baker promo targets London students
Play.com teams with River Island for discounts
Tesco runs cheap books ad
Waterstone’s and Thomson team up for summer campaign
Mother asks us to “Trust Boots”
Majestic launches summer sales
Avon plugs breast cancer awareness
Bloomsbury bookshops launch major ad campaign
Carphone to personalise welcome packs
JD Sports hits Mancunian tables
Frosts plans DM drive
 ACCOUNT GAINS/LOSSES
Woolworths hires Iris for £2m task
Sport-e appoints Rippleffect for design task
Bezier gets trolleys from Asda
Moss Bros Group appoints Gyro for ad campaign
Space.NK seeks agency
Dr Martens picks Industry@Saatchi
Argos
…creates pitch longlist for £30m account
…cuts it down
…and finally appoints Hall Moore
Ikea splits its international media buying business
Game seeks creative agency
St Luke's set to win Waterstone’s account
Wickes hires Cake to promote football link-up
RETAIL ADVERTISING REVIEW
 ADVERTISING EXPENDITURE
Figure 1: Total advertising expenditure by all advertisers (£m), May 2001-May 2005
Figure 2: Total advertising expenditure by all retail advertisers (£m), May 2001-May 2005
 USE OF MEDIA
Figure 3: Use of media by retail and all advertisers (%), May 2004 and May 2005
Figure 4: Use of media by retail and all advertisers (£m), May 2004 and May 2005
 TOP 25 RETAIL ADVERTISERS
Figure 5: Top 25 retailers by adspend (£), April 2005-May 2005
Food
Furniture
DIY
Other
Nielsen Media Research/Definitions
RETAIL SALES AND INFLATION
 RETAIL SALES
Office for National Statistics
Figure 6: Retail sales trends: June 2004-June 2005
Figure 7: Non seasonally adjusted % value change on previous year, Jun 2004-Jun 2005
Figure 8: Seasonally adjusted % volume change on previous year, Jun 2004-Jun 2005
Significant features of the latest ONS statistics
Confederation of British Industry
British Retail Consortium/KPMG
 RETAIL PRICE INFLATION TRENDS
Figure 9: Annual percentage change in retail price index for selected product groups: Jun 2004-Jun 2005
Figure 10: Annual percentage change in retail price index for selected product groups: Jun 2004-Jun 2005
Retail Prices Index
Consumer Prices Index
British Retail Consortium: Shop Price Index
SECTOR ANALYSIS – CLOTHING AND FOOTWEAR
 SALES TRENDS
Figure 11: Clothing & footwear retailers: Sales trends, 1996-Q1 2005
Figure 12: Clothing and footwear retailers as % all retail sales: 1997-2005
 RETAIL PRICE INFLATION
Figure 13: Indices of retail prices for product categories (clothing and footwear), Jan 1997-Jun 2005
 SALES BY SUB-SECTOR
Figure 14: Breakdown of clothing retailers’ sales by sub-sector, 1994-2005
Figure 15: Clothing sales: channels of distribution, 2004
 CONSUMER EXPENDITURE
Figure 16: Consumer expenditure on selected product categories, 1995-2004, (£m current prices including VAT, not seasonally adjusted)
 LATEST TRENDS
Clothing retailers
Footwear retailers
SECTOR NEWS REVIEW – CLOTHING AND FOOTWEAR
Burberry
…strategy begins to work
…with global business offsetting UK
…and makes sprightly start
Sales dive at French Connection
Hugo Boss plans London flagship
Jacques Vert turns loss into profit
Sole bidder for Jane Norman announced
Matalan continues to slide
Mulberry posts impressive results
Peacock
…sees bonmarché regress
…but core business deliver
…lauding fashion focus
…and rearranging kidswear
River Island lifts retail gloom
Kurt Geiger in equity buy-out
Shoppers hot for Ann Summers
Austin Reed
…returns to profitability
…and stems sales decline
Jaeger presents London lines
LTS secures rescue deal
Moss Bros
…posts increased margins
…and moves forward with home shopping
New Look
…outlines refinancing plans
…and reports strong year
Ted Baker on track
Actif issues profits warning
Sunnucks eyes UK for Gap expansion
Eisenegger team buys remaining stores
Ciro Citterio in liquidation
Monsoon buys Etam stores
Fat Face
…sold to Advent
…and heads down under
FCUK recovery on ice
Joseph
…falters as bidders line up
…but moves Onward and upward
Mosaic to float on Icex
Matalan
…recent dip takes shine off results
…but finally offloads Lee Cooper
…and considers comeback via electricals
Mothercare stays on target
Sales rocket at Hobbs
Primark turns in strong performance
Stylo returns in style
Allders loss hits Alexon
Arcadia
…invests in Topshop flagships
…as Green eyes Etam acquisition
…and clinches the deal
H&M opens flagship store
LK Bennett
…owner poised to abandoned auction
…and sale collapses
Moss Bros outperforms in tough market
Mothercare
…returns to form
…boosted by international expansion
…but halts refit programme
Handbags drive Mulberry sales
SECTOR ADVERTISING REVIEW – CLOTHING
 ADVERTISING EXPENDITURE
Figure 17: Total advertising expenditure by clothing retailers, May 2001-May 2005
 USE OF MEDIA
Figure 18: Use of media by clothing retailers and all retailers (%), May 2004 and May 2005
Figure 19: Use of media by clothing retailers and all retailers (£m), May 2004 and May 2005
 TOP TEN CLOTHING RETAIL ADVERTISERS
Figure 20: Top ten clothing retailers by adspend, May 2004 and May 2005
 RETAILER FOCUS
Marks & Spencer
Figure 21: Marks & Spencer, media use by adspend and as share of total, May 2004-May 2005
Figure 22: Marks & Spencer, top brands by adspend, May 2005
Matalan
Figure 23: Matalan, media use by adspend and as share of total, May 2004-May 2005
Figure 24: Matalan, top five brands by adspend, May 2005
TK Maxx
Figure 25: TK Maxx, media use by adspend and as share of total, May 2004-May 2005
Figure 26: TK Maxx, top five brands by adspend, May 2005
Nielsen Media Research/Definitions
REPORT FOCUS: CLOTHING RETAILING
Main players in the sector
Figure 27: Leading specialist clothing retailers, 2004
Figure 28: UK: Clothing market – channels of distribution, 2004
 CONSUMERS AND THE CLOTHING MARKET
Spending continues growing robustly
Figure 29: UK: Consumer spending on clothing, 2000-04
Figure 30: UK: Relative performance of clothing market, 2000-04
Who are clothes shoppers?
Figure 31: Well dressed, sporty, practical, stylish, and shopoholic consumer groups, by gender, age, family income, region, working status and presence of children, Great Britain, 2004
Figure 32: Fashion conscious, big spenders, individualists, and label seekers consumer groups, by gender, age, family income, region, working status and presence of children, Great Britain, 2004
Figure 33: Agreement with clothing lifestyle statements, by well-dressed, sporty, practical, shopaholics and stylish typology groups, Great Britain, 2004
Figure 34: Agreement with clothing lifestyle statements, by fashion conscious, big spenders, individualists and label seekers consumer typology groups, Great Britain, 2004
Points of interest
Where do they go?
Figure 35: Outlets used for purchasing clothing in the last 12 months, 2003-05
Figure 36: Outlets used for purchasing clothing in the last 12 months, 2003-05 % change
Figure 37: Which department & variety stores consumers have bought clothing from for themselves, in the last 12 months, by gender, age and socio-economic group, April 2005
Figure 38: Which supermarkets and value retailers consumers have bought clothing from for themselves, in the last 12 months, by gender, age and socio-economic group, April 2005
Figure 39: Which clothing specialist consumers have bought clothing from for themselves, in the last 12 months, by gender, age and socio-economic group, April 2005
What consumers want
Figure 40: What consumers would like to see when buying clothes, April 2005
Figure 41: What consumers would like to see regarding sizing and avalability when buying clothes, by gender, age and socio-economic group, April 2005
Figure 42: Other things consumers would like to see when buying clothes, by gender, age and socio-economic group, April 2005
 FORECASTS AND PROSPECTS
Figure 43: UK: Clothing specialists’ sales, 2004-09
Figure 44: UK: Clothing specialists’ sales as % of all retail sales, 2000-09