UK Retail Briefing - August 2012

ANALYST COMMENT
 WALGREENS AND BOOTS
Merger or takeover?
Why?
Does it all make sense?
So – why the doubts?
And Boots?
Who benefits?
HEADLINES FOR THE MONTH
Grocers
Clothing retailing
Mixed goods retailers
Multi-Sector retailing
Miscellaneous specialists
Department Stores
DIY retailing
Music and Video Goods retailing
Carpet and furniture retailing
Home Shopping
Health and beauty retailing
Book and stationery retailing
Sports and leisure Goods retailing
Jewellers
Economy
RETAIL SALES – BACKGROUND AND OUTLOOK
Key points
Retail sales trends
Figure 1: Retail sales trends, 2011-12
The BRC data for June
Figure 2: UK retail sales y/y growth, BRC vs ONS, 2010-12
John Lewis
Figure 3: John Lewis: Year-on-Year Growth, 2011-12
Inflation and wages
Figure 4: RPI vs Average Weekly earnings growth, 2008-2012
Inflation
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
Figure 6: Mintel Tracker survey: Agreement with statements on grocery shopping habits, Mar-Jun 2012
Figure 7: Mintel Tracker survey: Agreement with statements on grocery shopping habits, by age/affluence, June 2012
Retail sales and consumer spending
Figure 8: Retail sales, 2007-12
Figure 9: Food retailers’ sales as percentage of all retail sales (excl. fuel), 2007-12
Figure 10: Consumer spending, 2007-12
Inflation
Figure 11: Consumer prices index: Year-on-year percentage change, June 2011 – June 2012
Figure 12: Primary commodity prices: year-on-year percentage change, Q1 2011 – Q2 2012
Leading retailers
Figure 13: Leading ten grocery retailers, ranked by 2010/11 revenues, 2010/11 – 2011/12
NEWS ANALYSIS
 GROCERS
Aldi to create 3,000 new jobs
Asda
…and Lidl increase pay to farmers after milk price protests
…George opens first Guernsey store
…Income Tracker: Disposable income stabilises in June
…to launch financial services
Iceland
…and Farmfoods face milk price protests
…plans to launch online grocery site
…to roll-out Bonus Card and coupon initiative
Morrisons
…and Asda in milk price war
…launches pop-up play parks
Nisa sees record sales growth
Sainsbury’s to introduce renewable energy solution to 100 stores
Tesco
…Bank adds mortgages to its offering
…invests in premium coffee shop
…launched virtual shopping wall at Gatwick Airport
…opens Olympic pop-up shop
…superstore managing director to head Extra division
The Co-operative
…Group’s CEO to step down
…looks set for further acquisitions
…secures £950m refinancing deal
 OTHER FOOD SPECIALISTS
Greggs' like-for-likes drop due to wet weather and store growth
Thorntons reports like-for-like rise in Q4
 OFF-LICENCES
Bargain Booze to appoint new chief executive
Oddbins launches campaign to oppose 'perverse' Olympic rules
 CLOTHING RETAILING
All Saints returns to profit and considers expansion trail
Ann Summers sales up 78%
Burberry
…reports 11% revenue boost
…to end fragrance licence agreement with InterParfums
Ethel Austin
…bought out of administration by Liric
…falls into administration
Evans to open new store on Oxford Street
French Connection
…kidswear set for international expansion
…reports falling revenues and issues profit warning
Jigsaw parent reports £10m loss
Next reports strong online growth and ups profit target
Primark
…plans Milton Keynes flagship
…sales rise despite bad weather
Rag & Bone opens first London store
Republic
…attracts premium menswear brands in upmarket repositioning move
…launches three new womenswear brands amid major growth strategy
Stella McCartney to launch new childrenswear range
SuperGroup
…reports falling underlying profits
…to expand categories
Tom Ford to open first UK standalone store
Urban Outfitters to open in Trinity Leeds
Victoria's Secret delays UK launch
Vivienne Westwood
…returns to profit
…to open store in Wales
 MIXED GOODS RETAILING
99p Stores
…reports profit surge, but slowing growth
…to extend food offering
Wilkinson reveals new store format
Poundland appoints Tesco director as chairman
The Original Factory Shop reports rising EBITDA
Wellchester to close down
 MULTI-SECTOR RETAILING
Argos launches Habitat range
Marks & Spencer
…announces new Per Una head
…confirms Bostock's departure and reports sales down in Q1
…first bank to offer fee-only service
…introduces contactless payment in London stores
…shares rise amid speculation of a takeover bid
 MISCELLANEOUS SPECIALISTS
Halfords
…chief executive resigns
…to offer practical driving tests in Government tie up
Hobbycraft looks to improve multichannel offer
Mothercare UK like-for-like sales fall 6.7% in Q1
 DEPARTMENT STORES
Allders purchase considered by former owner
Debenhams expands footwear range
Harrods
…opens revamped toy department
…reports profits up 15%
John Lewis
…director departs
…launches its biggest own brand yet
…to open first ever pop-up shop
…reports strong first half revenues
 DIY RETAILING
Kingfisher reports flat like-for-like sales
Robert Dyas
…back to growth
…sold to Paphitis
Travis Perkins’ retail division reports 8.8% fall in like-for-like sales
 ELECTRICAL RETAILING
Carphone Warehouse
…may takeover European venture after Best Buy bid
…reports 2% decline in like-for-likes
Comet on track to return to black with new owners
Dixons increases Pixmania stake
Maplin managing director exits
 MUSIC AND VIDEO GOODS RETAILING
Games Workshop reports rise in profits
HMV
…boss Simon Fox departs and Jessops' boss takes over
…Hammersmith Apollo deal complete
…reports full-year loss
…sales rise on back of Olympic ceremony
Musicroom reports 2.3% growth
 CARPET AND FURNITURE RETAILING
BrightHouse looks to boost online offer
Carpetright receives boost from wet weather
Dreams' owner plans restructuring
 HOME SHOPPING
Achica to launch own brands
Amazon
…retains top market share spot
…to open new digital media development centre in London
Asos
…denies director to exit
…sales up 31% in Q1
Brand Alley reports sales up 20% in H1
eBay partners with the British Fashion Council
Farepak customers to receive half their money back
Findel reports 8% increase in sales
Ocado launches pop-up virtual wall
Shop Direct reports 36% boost in EBITDA
The Hut considers Sir Terry Leahy as new chairman
 HEALTH & BEAUTY RETAILING
Chanel to open pop-up fragrance and beauty store
Lloydspharmacy set to make redundancies
The Perfume Shop to launch private-label collection
 BOOK AND STATIONERY RETAILING
American Greetings' Clinton Cards acquisition to be investigated by OFT
Clintons unveils its rebrand
 SPORTS AND LEISURE GOODS RETAILING
JJB Sports
…appoints La Senza director as new CEO
…chief executive to step down
…investors consider turnaround strategy
…looks for further funding after sales fall
Sports Direct
…acquires stake in Flannels
…reports rising profits in "record" year
 JEWELLERS
Boodles reports profit boost
Pandora profits fall due to stock swap plan
Signet Jewellers to cut 99 jobs
 ECONOMY
Bluewater to become UK's largest shopping centre
BRC
…July retail sales up 0.1%
…June retail sales boosted by Jubilee
…reports 0.5% fall in number of retail outlets
Capital Shopping Centres shows resilience
Consumer confidence still low
Food inflation for July reaches two-year low
Food is fastest growing sector for mobile searches
Kantar: Discount grocers report strong growth in market share
London sees increase in footfall despite concerns
London Waterloo station opens new balcony
ONS
…Inflation falls to 2.4% in June
…Retail sales volumes and values up in June
Portas pilots round two revealed
Sales soar at convenience stores
Scottish retail sales poor in June
Shop vacancy levels rise to record
West End suffers during Olympics, but etail grows