UK Retail Briefing - December 2005

ANALYST COMMENT
 OVEREXPANSION
Primark
Argos
No going back
THE MONTH IN UK RETAILING
 GROCERS
Asda reveals mini store plans
Sainsbury’s
…welcomes Tchibo
…and speeds up pharmacy programme
Whittard
…receives takeover approach
…and is bought out by Baugur
Julian Graves posts excellent year
Tesco
…retains strength in Q3
…and opens telecoms centres
Safeway leaves the retailing stage
 OFF-LICENCES
Unwins
…sale puts future in doubt
…as it teeters on the brink
 CLOTHING RETAILING
Bhs store refurb plans announced
Woes continue for French Connection
Forminster
…hit by loss
…and stumbles towards administration
Mango sees UK turnaround
Speciality Retail Group purchased for £30m
Mulberry maintains good form
Primark
…battles to replenish stock
…and looks to hit Oxford Street
Ted Baker extends Eastern presence
 MULTI-SECTOR RETAILING
John Lewis own-brand to take off
M&S
…signs up to celebrity
…and turns on the style
…adding restaurant offer
…and winning tax ruling
 DEPARTMENT STORES
Allders revives furniture brands
F&M down on full-year
Beauty sales boost Harrods
Selfridges solid in 2005
 DIY RETAILING
Kingfisher continues to struggle in Q3
Focus invests to cut costs
Topps back on song
 FURNITURE RETAILING
Tiles R Us in administration
Tough times at MFI
Land of Leather delivers in H1
ScS finds FY figures comfortable viewing
 HOME SHOPPING
Asos
…sees sales rocket
…but is hit by Hemel explosion
Pressure mounts at Findel
Kleeneze weighs down ERH
 HEALTH AND BEAUTY RETAILING
Superdrug to deliver the goods
 BOOK AND STATIONERY RETAILING
Borders rebrands Books Etc stores
Ottakar’s
…takeover bid referred
…amid profit fears
 JEWELLERS
Baugur acquires MW Group
 TOYS AND GAMES RETAILING
Retailers see PSP shortages
Game hit by mature technology
Suitors circle Gamestation
 MISCELLANEOUS SPECIALIST RETAILING
Halfords
…profit confirms good half
…while supplier terms tightened
EXECUTIVE APPOINTMENTS
Littlewoods Shop Direct sees management shake-up
House of Fraser designerwear reshuffle
Mothercare
…appoints new finance director
…and combines buying and marketing teams
Arnotts loses senior execs
New MD for Amazon
Tu man moves to Debenhams
HMV appoints top Monsoon marketer
John Lewis
…FD sadly dies
…and acting FD steps in
Wyevale chair to quit, Laxey looming
Foyles
…boss leaves
…and directors come in
TJ Hughes signs new finance director
New Look appoints directors for merchandise positions
Selfridges appoints comms director
Foot Locker names CFO
New FD named at Hamleys
Hancox jumps to Otto
Hargreaves loses business development director
Jones Bootmaker gets new boss after buyout
East
…loses chief executive
…sparking a mass departure
Sim bows out at Monsoon Accessorize
Asda appoints George chief
PRODUCT DEVELOPMENT – DAIRY
 MARKS & SPENCER
 MORRISONS
 TESCO
 LIDL
 WAITROSE
 ASDA
ADVERTISING NEWS
 NEW CAMPAIGNS
Pietersen to front Burton
Borders corners the market in Christmas books
Tesco
…aims to snatch greater share of grey pound
…and gets arty
…ahead of eDiets push
Phones 4U in comedy drive
Sainsbury puts final touches on Xmas campaign
IKEA to publish loyalty magazine
Harrods launches plasma screen advertising
Miss Selfridge loses heart ... logo
Matalan begins Christmas campaign…
…as does WH Smith
…and John Lewis ditches celebs
 ACCOUNT GAINS/LOSSES
Ann Summers appoints Liquid Communications
The Walker Agency gets Land of Leather gig
PC World appoints digital agency Play
Start-rite appoints August.One
Phones4u appoints MC2
Ikea, Secret Weapon split up
RETAIL ADVERTISING REVIEW
 ADVERTISING EXPENDITURE
Figure 1: Total advertising expenditure by all advertisers (£m), Oct 2001-Oct 2005
Figure 2: Total advertising expenditure by all retail advertisers (£m), Oct 2001-Oct 2005
 USE OF MEDIA
Figure 3: Use of media by retail and all advertisers (%), Oct 2004 and Oct 2005
Figure 4: Use of media by retail and all advertisers (£m), Oct 2004 and Oct 2005
 TOP 25 RETAIL ADVERTISERS
Figure 5: Top 25 retailers by adspend (£), Sep 2005-Oct 2005
Food
Furniture
Variety stores
Other
Nielsen Media Research/Definitions
RETAIL SALES AND INFLATION
 RETAIL SALES
Office for National Statistics
Figure 6: Retail sales trends: November 2004-November 2005
Figure 7: Non seasonally adjusted % value change on previous year, Nov 2004-Nov 2005
Figure 8: Seasonally adjusted % volume change on previous year, Nov 2004-Nov 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: Nov 2004-Nov 2005
Figure 10: Annual percentage change in retail price index for selected product groups: Nov 2004-Nov 2005
Retail Prices Index
Consumer Prices Index
British Retail Consortium: Shop Price Index
SECTOR ANALYSIS – ELECTRICALS
 SALES TRENDS
Figure 11: Sales trends by value (£m excl VAT) 1997-2005
Figure 12: Electrical retailers as % of all retail sales: 1997-2005
 RETAIL PRICE INFLATION
Figure 13: Indices of retail prices for product categories, 2000-05 (Jan 1987=100)
 CONSUMER EXPENDITURE
Figure 14: Consumer expenditure on selected product categories (£m), 1998-2005 Q2
 ELECTRICAL RETAILERS: LATEST TRENDS
Figure 15: Electrical retailers, 2004
SECTOR NEWS REVIEW: ELECTRICALS
 JULY
Kesa reports H1 hike
Dixons
…looks to women
…but results disappoint in H2
 AUGUST
3 to open retail chain
 SEPTEMBER
Second half hangover continues at Dixons
 OCTOBER
Profits dive at Kesa
DSG International (Dixons)
…looks to end woes with new business
…and steps up expansion drive
 NOVEMBER
Powerhouse selling off stores
 DECEMBER
DSG faces up to harsh UK retail scene
Kesa shows fighting spirit in Q3
SECTOR ADVERTISING REVIEW – ELECTRICALS
 ADVERTISING EXPENDITURE
Figure 16: Total advertising expenditure by electrical retailers, October 2001-October 2005
 USE OF MEDIA
Figure 17: Use of media by electrical retailers and all retailers (%), October 2004 and October 2005
Figure 18: Use of media by electrical retailers and all retailers (£m), October 2004 and October 2005
 TOP TEN ELECTRICAL RETAIL ADVERTISERS
Figure 19: Top ten electrical retailers by adspend, October 2004 and October 2005
 RETAILER FOCUS
PC World
Figure 20: PC World, media use by adspend and as share of total, October 2004-October 2005
Figure 21: PC World, top brands by adspend, October 2005
Currys
Figure 22: Currys, media use by adspend and as share of total, October 2004-October 2005
Figure 23: Currys, top five brands by adspend, October 2005
Comet
Figure 24: Comet, media use by adspend and as share of total, October 2004-October 2005
Figure 25: Comet, top five brands by adspend, October 2005
Dixons
Figure 26: Dixons, media use by adspend and as share of total, October 2004-October 2005
Figure 27: Dixons, top five brands by adspend, October 2005
Nielsen Media Research/Definitions
REPORT FOCUS: DESIGNERWEAR RETAILING
 DESIGNERWEAR – MOVING ON?
 MINTEL INSIGHT
 MARKET OVERVIEW
Figure 28: Sales through clothing retailers, at current and constant 2000 prices, 2000-05
Figure 29: Consumer spending on women’s and men’s designerwear, 2000-05
 DESIGNERWEARERS
What is bought?
Figure 30: Designer labels purchased in the last 12 months, August 2003 and 2005
Figure 31: Designer labels purchased in the last 12 months, by gender, age and socio-economic group, August 2005
Figure 32: Designer labels purchased in the last 12 months, by gender, age and socio-economic group, August 2005
Where designerwear is bought
Figure 33: Sources of purchase for designer label clothing in the last 12 months, August 2003 and 2005
Figure 34: Sources of purchase for designer label clothing in the last 12 months, by gender, age and socio-economic group, August 2003 and 2005
Factors that are important in purchasing designerwear
Figure 35: Shopping for designer label clothing, August 2005
Figure 36: Shopping for designer label clothing, by gender, age and socio-economic group, August 2005
Figure 37: Shopping for designer label clothing, by gender, age and socio-economic group, August 2005
Figure 38: Shopping for designer label clothing – attitudes of all consumers and purchasers in the last 12 months, August 2005
Figure 39: Attitudes towards designer label clothing, by gender, age and socio-economic group, August 2005
Figure 40: Attitudes towards designer label clothing, by gender, age and socio-economic group, August 2005
 RETAIL MARKET IN-DEPTH
Women’s designer clothing
Figure 41: Retail market shares of women’s designerwear market, by outlet type, 2001, 2003 and 2005
Men’s designer clothing
Figure 42: Retail market shares of men’s designerwear market, by outlet type, 2001, 2003 and 2005
 RETAILERS
Calvin Klein
Burberry
Figure 43: Burberry, split of sales, by product category, 2005
Marzotto – owner of Hugo Boss
Polo Ralph Lauren
Debenhams
Figure 44: Debenhams: UK and Ireland, planned store opening programme, spring 2006-autumn 2007
Figure 45: Designers who create ranges for Designers at Debenhams, 2005
Figure 46: Debenhams: Group financial performance, 2000-04
 INSIDE RETAIL – THE TRADE PERSPECTIVE
Differing views on 2004 sales performance
2005 so far, and views on tourism
Key factors influencing designer sales
Negative influences – Chav culture
The Internet – opportunity or threat?
 FUTURE AND PROSPECTS
What retailers should do
Department stores
Independents
International designer boutiques
Discounters/factory outlet centres
The Internet
Figure 47: Forecast of the UK designerwear market, at current and constant 2005 prices, 2005-10