UK Retail Briefing - September 2012

ANALYST COMMENT
 THE PERILS OF VERTICAL INTEGRATION
It won’t happen – but …
One the great retail success stories of the last few years
But what happens if Apple loses that lead?
So what should the Apple stores be doing?
HEADLINES FOR THE MONTH
Convenience stores
Grocers
Other food specialists
Clothing retailing
Mixed goods retailing
Department stores
Music and video goods retailing
Electrical retailing
Furniture retailing
Home shopping
Health and beauty retailing
Sports and leisure goods retailing
Garden centres
Economy
RETAIL SALES – BACKGROUND AND OUTLOOK
Key points
Retail sales trends
Figure 1: Retail sales trends, 2011-12
BRC data for August
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, 2008-12
Inflation
Figure 5: Annual percentage change in the consumer price index for selected product groups, 2011-12
Looking forward
SECTOR FOCUS: DIY, FURNITURE, AND FLOORCOVERINGS SPECIALISTS
Mintel’s Tracker survey

Figure 6: Mintel consumer tracker: Trends in activities done and consider to do, Jun-Aug 2012
Figure 7: Mintel consumer tracker: Agreement that extra money is spent on furniture/home improvements/décor, Nov 2009-Aug 2012
Retail sales and consumer spending
Figure 8: Retail sales, 2007-12
Figure 9: Furniture/floorcoverings/DIY specialists’ sales as % of all retail sales, 2007-12
Figure 10: Consumer spending, 2007-12
Figure 11: Floorcovering specialists: Share of consumer spending on floorcoverings, 2007-12
Leading retailers
Floorcoverings
Furniture
Figure 12: Leading furniture specialists by revenues, 2010/11-2011/12
DIY
Figure 13: Leading DIY specialists by revenues, 2010/11-2011/12
NEWS ANALYSIS
 CONVENIENCE STORES
Costcutter
…reports 4% rise in sales in H1
…appoints former head of Clintons as new CEO
Spar to roll out second phase of S Budget range
 GROCERS
Asda
…announces small like-for-like sales rise
…launches baby site
…Asda and Sainsbury's see market growth
Booths begins roll-out of new store format
Iceland appoints new international business director
Morrisons
…launches new voucher scheme
…sales figures expected to be down
…reports 0.9% fall in like-for-likes
…urges consistency in food labelling
Tesco
…acquires eBook platform provider
…announces new food delivery offer
…sale and leaseback deal
…green light for new store and homes development
…launches in-store Disc-on-Demand service
…reveals improved food labelling
…secures planning consent for Norfolk store
Waitrose set for growth
Co-op profits tumble 16%
 OTHER FOOD SPECIALISTS
Julian Graves disappears from the high street
Hotel Chocolat to open more stores
 CLOTHING RETAILING
Jane Norman to close its London headquarters
Ann Summers launches interactive lingerie app
Aquascutum hunts for new London flagship
Arcadia to change sourcing strategy
Armani Exchange to open in Wales
Barnardo’s introduces high fashion charity store
Bestseller to open four new Jack & Jones stores in the UK
Blue Inc set for international expansion
Burberry opens new Regent Street store
Eileen Fisher plans to increase presence in UK
Fat Face reports 7% increase in sales and steadying profits
Fred Perry receives damages from Arcadia
H&M reports 2% rise in like-for-like sales
Hackett to re-launch e-commerce platform
J Crew in process of securing first UK store
Jack Wills appoints former marketing boss of Vodafone for new role
Jacques Vert to merge Irisa HQ with London head office
Jaeger sales rise thanks to Better Capital
New Look restarts hunt for chief executive
Primark reports 17% boost in sales
Rampant Sporting goes up for sale
Reiss launches revamped website
Republic attracts premium menswear brands in upmarket repositioning move
River Island set to launch accessories range designed by bloggers
Select to launch new label targeting mid-market
SuperGroup co-founder exits
The Original Factory Shop to add fashion and footwear to its online range
Topman in search for new managing director
Whistles buys back shares from Icelandic government
White Stuff
…pre-tax profits fall 81%
…to launch new smart range
Longchamp to open new store
 FOOTWEAR RETAILING
Clarks to launch collection in Debenhams
Kurt Geiger to close stores
 MIXED GOODS RETAILING
Poundstretcher’s chief executive steps down after three months
Poundworld takes store count to 200
Wilkinson
…reports 62.6% fall in pre-tax profit
…reveals new store format
…asks staff to take voluntary drop in hours
 MULTI-SECTOR RETAILING
Matalan to invest in multichannel and ecommerce operations
Westfield’s H1 net profit boosted to £534.4 million
M&S
…poaches senior House of Fraser executive
…to sell wine and clothing with iPads
…focuses on digital
…introduces contactless payment in London stores
 DEPARTMENT STORES
Allders to close
Debenhams
…expands footwear range
…reports boost in homeware and furniture sales
John Lewis
…and M&S to open at new development in York
…announces further details for pop-up shop
…given the go ahead for new Essex store
…to open first flexible department store
M&Co welcomed by House of Fraser
 MUSIC AND VIDEO GOODS RETAILING
HMV
…to become "portable entertainment" specialist through partnerships with digital firms
…to launch web-based in-store service, myhmv
…to open new format store with café and wi-fi
 ELECTRICAL RETAILING
Carphone Warehouse
…introduces mobile payments app
…appoints new retail director
Dixons
…increases Pixmania stake
…reports positive first quarter results
Everything Everywhere strikes deal with Mastercard for mobile payments
Jessops appoints new Chief Operating Officer
 FURNITURE RETAILING
Bathstore to be transformed into omnichannel business
Dwell focuses on multichannel offer with appointment of new director
Jysk to expand in the UK
 HOME SHOPPING
Amazon
…2000+ jobs at new fulfilment centres
…launches Amazon Local daily deals site
…launches Appstore in Europe
…to deliver parcels to corner shops and newsagents
EBay reports 28.2% boost in sales volume
Farfetch.com signs two new stores as part of strategic growth plans
Ocado
…announces plan to stimulate growth through price war
…defends itself after analysts raise banking concerns
Play.com
…generates £2 million sales through Facebook
…to encourage consumer interaction with social media loyalty scheme
Social shopping expected to rise 44% by 2014
Wiggle reports record week following British cycling success
 HEALTH AND BEAUTY RETAILING
Boots partners with Musgrave to launch new food offer
 BOOK AND STATIONERY RETAILING
UK: Discount bookseller reports sales growth
UK: WHSmith’s full-year results expected to be at top end of market expectations
 SPORTS AND LEISURE GOODS RETAILING
JD Sports to acquire OneTrueSaxon and dispose of Canterbury
JJB
…given two weeks to submit survival plan
…shareholder Dick's writes off investment
…up for sale
…is eyed by Jon Moulton's Better Capital
…second largest shareholder reduces stake in the business
…founder eyes 40 stores
…founder raises concerns over retailer’s future
…Jon Moulton pulls out of the race to buy JJB
…more than ten companies in the running for JJB
Sports Direct sales reports strong sales
 GARDEN CENTRES
Next begins garden centre roll out
Tesco’s Dobbies Garden Centres reports 22% sales boost
 TOYS AND GAMES RETAILING
The Entertainer reports 12.3% like-for-like sales boost
 MISCELLANEOUS SPECIALIST RETAILING
Mothercare
…unveils new revamped store
…welcomes Jools Oliver’s Little Bird range
 ECONOMY
BRC
…urges business rates freeze for 2013
…e-crime is largest emerging threat to retail
…Q2 footfall figures show further decline
…Sunday trading reform losing momentum
…retail sales suffer during Olympics
Government to invest £5.5 million in high street revival
ONS
…inflation rises to 2.6% in July
…July retail sales up 0.5%
…weak sales forecast despite encouraging June
July sees highest online growth of 2012
Small stores call for supermarket tax
Store total falls for first time in over a decade
Government called on to change current pricing laws
Vacancy rates rise to 14.6%
Use of Contactless Payment technology is gaining momentum