UK Retail Briefing - February 2015

ANALYST COMMENT
 ONLINE – TRYING TO GET A SENSE OF PROPORTION
1. Is it necessary to have an online offer?
2. The corollary
3. Drawbacks
The elephant in the room
RETAIL SALES – BACKGROUND AND OUTLOOK
Key points
Retail sales trends
Figure 1: Retail sales trends, 2014/15
Figure 2: UK retail sales y/y growth, BRC vs ONS, 2013-15
John Lewis
Figure 3: John Lewis: Year-on-year growth, 2014
Inflation and wages
Figure 4: The income squeeze: Wages growth vs inflation, 2009-14
Figure 5: Annual percentage change in the consumer price index for selected product groups, 2014
Looking forward
SECTOR FOCUS – DIY AND FURNITURE RETAILING
Key points
Retail sales: A good year for both categories
Figure 6: DIY and hardware specialists’ sector sales: Annual % change, January 2013-January 2015
Figure 7: Furniture and lighting specialists’ sector sales: annual% change, January 2013-January 2015
Record levels of low inflation
Figure 8: Annual% change in consumer price index for furniture, household equipment & routine maintenance and overall CPI, January 2014- January 2015
Housing market continues to improve
Figure 9: Number of UK residential property transactions, non-seasonally adjusted, January 2013-December 2014
Furniture news analysis
Sofa retailers head to the market
Sofa.com acquired
New 200-store floorings chain to launch in summer 2015
HEADLINES FOR THE MONTH
Grocers
Other food specialists
Clothing retailing
Footwear retailing
Department stores
Multi-sector retailing
Electrical retailing
Music and video goods retailing
Furniture and DIY retailing
Home shopping
Book and stationery retailing
Economy
NEWS ANALYSIS – FOOD AND DRINK
 CONVENIENCE STORES
UK: Booker to expand its Family Shopper banner
UK: Conviviality Retail purchases all GT News stores
UK: McColl’s posts ‘resilient’ Christmas sales
UK: Scotmid reveals first ‘food to go’ outlet
UK: Spar UK sales up 5%
 GROCERS
UK: Aldi to open 70 new stores in 2015
UK: Asda
…chief announces changes to executive team
…prepared to invest £170m in superstores
...teams up with Timpson Dry Cleaners
UK: Budgens unveils new concept for smaller stores
UK: Grocery market grows over Christmas
UK: Lidl sales up 20% over Christmas
UK: Morrisons
…CEO steps down as sales fall
…considers appointing David Potts
…like-for-likes fall 3.1% during the Christmas period
…to sell three stores for £100m
…to close salary-linked pension schemes
UK: Sainsbury’s to cut 500 jobs
UK: Tesco
…appoints two agencies
…CIO leaves for Target
…close to Blinkbox Music sale
…creates shopping app for Google Glass
…facing investigation by Groceries Code Adjudicator
…implements online community for suppliers
…makes further senior personnel cuts
…narrows down the search for chairman role
…reveals the 43 stores facing closure
…to close Blinkbox Books
UK: Waitrose
…announces 2015 expansion plans
…alters free hot drink deal
 OFF-LICENCES
UK: Bargain Booze sales dip 0.4% in first half
 OTHER FOOD SPECIALISTS
UK: Greggs reports a ‘very strong Christmas’
UK: Naked Wines reports on a ‘bumper’ Christmas
UK: Thorntons reports strong Christmas trading
NEWS ANALYSIS – NON-FOOD
 CLOTHING RETAILING
UK: Austin Reed Group
…to close 31 stores
…CVA gains approval
UK: Bank gains interest
UK: BHS up for sale
UK: Bonmarché sales up 6.1% over Christmas
UK: Burberry Q3 retail sales increase 15%
UK: Jules B owners invest to make up for accounting errors
UK: Karen Millen’s losses double
UK: Mamas & Papas widens losses
UK: Matalan Q3 sales down 7.7%
UK: Mothercare UK like-for-likes edge up over Christmas
UK: New Look like-for-like sales fall 1.7%
UK: Phase Eight bought for £238m
UK: Pretty Green sales climb by a third
UK: SuperGroup sales rise 12.4%
UK: The White Company sales jump 14.4%
UK: TM Lewin returns to profit
UK: White Stuff sees strong uplift at Christmas
 FOOTWEAR AND ACCESSORIES RETAILING
UK: Kurt Geiger
…enters children’s footwear market
…reports Christmas boost
UK: Jimmy Choo grows revenues by 12%
UK: Office receives official warning following customer data breach
UK: Radley increases turnover by 13%
UK: Shoe Zone sales drop 10.8% in 2014
UK: Shoon put up for sale
 DEPARTMENT STORES
UK: Beales accepts offer from English Rose
UK: Debenhams hosts Bestseller’s first UK concessions
UK: Harrods to stock smart running jackets
UK: John Lewis
…closes Defined Benefit pension scheme
…makes changes to holiday pay policy
…to open third distribution centre in Milton Keynes
UK: Sports Direct’s Mike Ashley increases put option in Debenhams
 MULTI-SECTOR RETAILING
UK: Argos
…like-for-like sales flat over Christmas
…to exclusively stock Cherokee
…to open digital shops in Sainsbury’s
UK: B&M Q3 sales surge 28.8%
UK: Marks and Spencer poaches Next’s head of menswear design
UK: Original Factory Shop report record-breaking Christmas
UK: Poundland
…posts revenue growth of 9.8%
…to acquire 99p stores
 ELECTRICAL RETAILING
UK: Dixons Carphone report ‘strong’ Christmas trading
UK: Dixons Carphone signs new partnership with EE and launches own mobile service
UK: Rent-to-own retailers to be investigated by the FCA
UK: Three owners in talks to buy O2
 MUSIC AND VIDEO GOODS RETAILING
UK: Game issues profit warning
UK: HMV sales up 17.5%
 FURNITURE AND DIY RETAILING
UK: Carpetright like-for-like sales increase 7.5%
UK: DFS
…announces IPO
…to target valuation of £1bn
UK: Ikea grows sales by 11.1%
UK: Made.com opens digital showroom in Soho
UK: Sofa.com sold for £50m
 HOME SHOPPING
UK: AO World Q3 revenues increase 38%
UK: Asos
…founder sells £20m worth of shares
…reports positive Christmas growth
UK: First beacon-enabled click-and-collect system launched
UK: International appetite for UK brands increases
UK: Ocado
…Christmas trading up 14.8%
…reports first annual pre-tax profit
…teams up with Marie Claire for online beauty store
UK: Shop Direct
…launches first mobile app
…growth driven by Very
 HEALTH AND BEAUTY RETAILING
UK: AS Watson
…posts strong Christmas trading
…to acquire Dirx Drugstores
UK: Bestway to rebrand Co-operative Pharmacies
 BOOK AND STATIONERY RETAILING
UK: Blackwell's returns to profit
UK: Card Factory
…eyes up Paperchase
…revenues up 8.1%
UK: Foyles appoint new CEO
UK: Paperchase increases like-for-likes by 3.1%
UK: WH Smith sees high street sales fall 5%
 SPORTS AND LEISURE GOODS RETAILING
UK: Evans Cycles draws interest from Mike Ashley
UK: Halfords report bumper Christmas
UK: JD Sports like-for-likes jump 12%
UK: Sports Direct facing claim from zero-hour workers
 OPTICIANS
UK: Pets at Home has a ‘robust’ quarter
 ECONOMY
UK: Crime costs the retail industry £603m
UK: December retail sales decline 0.4%
UK: Retail sales grow 2.5% in December
UK: Shop prices fell 1.3% in January
UK: UK retail sales edge up 0.2% in January