UK Retail Briefing - August 2014

ANALYST COMMENT
Why – Problems at Tesco
Why – Changes in the sector
Where next?
Can it be done?
RETAIL SALES – BACKGROUND AND OUTLOOK
Key points
Retail sales trends
Figure 1: Retail sales trends, 2013-14
BRC data for July
Figure 2: UK retail sales y/y growth, BRC vs ONS, 2013-14
John Lewis
Figure 3: John Lewis: Year-on-year growth, 2013-14
Inflation and wages
Figure 4: The income squeeze: Wages growth vs inflation, 2009-14
Inflation
Figure 5: Annual percentage change in the consumer price index for selected product groups, 2013-14
Looking forward
SECTOR FOCUS – FOOD RETAILING
Executive summary
Inflation declines reflect price competition
Figure 6: Consumer prices: Annual % change in food, beverages and tobacco, June 2013-June 2014
Figure 7: Shop-prices: Annual % change in food, June 2013-July 2014
Food retailers’ sales
Figure 8: Retail sales: Annual % change in value sales, July 2013-June 2014
Looking ahead
Major grocers’ recent results
Figure 9: Major grocers’ year-on-year sales growth, 2014
HEADLINES FOR THE MONTH
Grocers
Clothing
Multi-sector retailing
Department stores
DIY
Electrical retailing
Home shopping
NEWS ANALYSIS – FOOD AND DRINK
 CO-OPS
Co-op
…announces governance reform proposals
…sells its farms
…sells its pharmacy chain
…to open pop-up kiosks
…trials tablet trolleys
 CONVENIENCE STORES
Booker to open new Family Shopper stores
McColl’s
…launches loyalty scheme
…sales grow 3.6%
 GROCERS
Aldi
…launches first smartphone
…founder Karl Albrecht dies aged 94
…to launch equestrian clothing
Lidl to offer premium French wine selection
Morrisons
…partners with Quidco
…Q1 like-for-likes
…sells Kiddicare to Endless
Ocado to open new warehouse
Sainsbury's
…now sole owner of Anobii
…names first two Netto sites
…to close non-food website
…to power store on food waste
Tesco
…hire Marks & Spencer finance head
…Phillip Clarke to stand down
…to build 4,000 homes
 OFF-LICENCES
Conviviality full-year pre-tax profits up
 MARKET SHARE UK
Tesco and Morrisons sales down 3.8%
NEWS ANALYSIS – NON-FOOD
 CLOTHING RETAILING
Bonmarché like-for-like sales up
Boux Avenue to open first airport store
Champion to return to the UK
East sales dip 2%
Internacionale brand name for sale
La Senza
…administrator closes six outlets
…more store closures
Matalan to launch Oxford Street Flagship
Next sales grow 10.7% in first half
Oliver Bonas launches click-and-collect
Pepe Jeans considers sale
Primark sales soar 22% in Q3
Select buys 18 Internaçionale stores
SuperGroup sales grow 19.6%
White Stuff sales jump 16.2%
 FOOTWEAR RETAILING
Office considering £300 million stock market flotation
 LUXURY RETAILERS
Jimmy Choo opens doors of virtual showroom
 MULTI-SECTOR RETAILING
Argos
…expands use of augmented reality in catalogues
…to cut or freeze 10,000 prices
B&M sales grow 31.9% in Q1
Hema to launch UK website in September
Marks & Spencer recruit Tesco internet chief
Poundstretcher cuts prices across the board
 DEPARTMENT STORES
Debenhams poaches Mothercare Chief Financial Officer
Fortnum & Mason standalone airport store
Harrods to redevelop menswear department
John Lewis
…to launch ‘Tea on The Green’ in Glasgow city centre
…partnership sales rises 6.3% in first half
Selfridges
…launches Cartier online
…opens Christmas shop
 DIY RETAILING
Homebase attracts takeover bids
Home Retail Group considering selling Homebase
Kingfisher like-for-like sales fall 1.8% in Q2
Travis Perkins sales rise 11.5% in first half
 ELECTRICAL RETAILING
Comet administrators facing probe
Dixons Carphone
… announce shareholders support for merger
…opens first store
 MUSIC AND VIDEO GOODS RETAILING
HMV like-for-like sales grow 9.2%
 CARPET RETAILING
Carpetright sales grow 5.2% in Q1
Floors-2-Go collapses into administration again
 HOMEWARES RETAILING
Cath Kidston attracts Chinese investor
 HOME SHOPPING
Amazon
…launches two-day European delivery
…launches wearable technology store
Ao.com like-for-like sales jump 30% in Q1
eBay
…partners with Sotheby’s
…The British Fashion Council to launch eBay shop
Findel sales down
N Brown
…hires CIO
…Simply Be announces Kelly Brook collection
Net-a-Porter Chief Executive steps down
 HEALTH AND BEAUTY RETAILING
Walgreens expected to take full control of Alliance Boots
 BOOK AND STATIONERY RETAILING
Smiggle to double UK store portfolio
 SPORTS AND LEISURE GOODS RETAILING
Alan Fort to take control of American Golf on an interim basis
Sports Direct
…profits grow 19.8%
…to open stores in Australasia
 GARDEN CENTRES
The Garden Centre Group to return to Wyevale
 OPTICIANS
Lenstore posts record billing in May
 MISCELLANEOUS SPECIALIST RETAILING
Brighthouse revenue grows by 12.2%
Card Factory sales rise 8.9% in first half of the year
Halfords sales accelerate 7.9% in Q1
Kiddicare stores to close
Mothercare
…appoints new chief executive
…Destination Maternity withdraws bid
Pets at Home sales jump 10.4%
The Fragrance Shop sales jump 11.2%
Thorntons' sales grow 0.6% Q4
 MISCELLANEOUS
Royal Mail expands its click & collect service
 ECONOMY
Retail sales growth lowest in three years
Retail sales rise 4.2% in June
Shop prices fall in July
UK: Tesco and Morrisons sales down 3.8%