UK Retail Briefing - June 2016

ANALYST COMMENT
The opportunity at the older end of the market
Why did it fail?
Opportunities at the older end of the market
Two markets
Who serves the older market?
Figure 1: Social media word cloud for M&S, May 2016
The opportunity
RETAIL SALES – BACKGROUND AND OUTLOOK
Key points
Retail sales
Figure 2: Retail sales trends, 2015/16
Figure 3: UK retail sales y/y growth, BRC vs ONS March 2014- March 2016
John Lewis
Figure 4: John Lewis – Year-on-year growth, 2015-16
Inflation and wages
Figure 5: Real wages growth: – Wages growth vs inflation, 2010-16
Inflation
Figure 6: Annual percentage change in the consumer price index for selected product groups, 2015-16
Looking forward
SECTOR FOCUS – DIY RETAILING
Fluctuating retail sales affected by the weather
Figure 7: Annual percentage change in value and volume sales of hardware, paints and glass specialists, non-seasonally adjusted, 2015 – May 2016
Price deflation holding back value sales
Figure 8: Annual percentage change in consumer prices, by DIY categories and overall CPI, Sep 2015 – May 2016
Property market growing, as is renting…
Figure 9: Number of residential property transactions with a value of £40,000+ in the UK, non-seasonally adjusted, Jan 2015 – May 2016
Attitudes to DIY
Figure 10: Attitudes towards shopping for DIY/home improvements products, March 2016
HEADLINES FOR THE MONTH
Convenience stores
Grocers
Clothing retailers
Multi-sector retailing
DIY retailing
Electrical retailing
Furniture and homewares retailing
Home shopping
Economy
NEWS ANALYSIS – FOOD AND DRINK
 CONVENIENCE STORES
UK: Convenience store investment reaches £600m
UK: My Local looking to divest 10% of store estate
 GROCERS
UK: Aldi to open Shoreditch pop-up wine shop
UK: Asda
…reveals Clarke's future successor
…sales decline by 5.7%
UK: ‘Big four’ retain shoppers in flat grocery market
UK: Guess How Much! discount store opens its doors
UK: Iceland
…partners with mum vloggers for new campaign
…sees like-for-likes slide but profits remain flat
UK: Morrisons
…in nationwide tie-up with Timpson
…relaunches loyalty card as Morrisons More
UK: Sainsbury's
…Argos deal facing watchdog probe
…equips shoppers with smart fridges to tackle food waste
…finance chief John Rogers to take the reins at Home Retail
…like-for-like sales dip 0.8%
UK: Tesco
…F&F clothing to be subject to Direct delivery charges
…confirms sale of Giraffe and Kipa
UK: The Co-op rebrands thousands of stores with revived logo
UK: Whole Foods offer two-hour delivery in London
 OTHER FOOD AND DRINK SPECIALISTS
UK: Conviviality sales surge 137%
UK: Costco reports 7.1% growth
UK: Greggs relaunches mobile app integrating loyalty scheme
UK: Thorntons to offload Oxford Street flagship
NEWS ANALYSIS – NON-FOOD
 CLOTHING RETAILING
UK: Austin Reed
…estate to be broken up for sale
…stores to shutter after no viable offers were received
UK: Bhs
…asks bidders to up their offers
…rescue fails putting 11,000 jobs in question
UK: Bonmarché revenue up 5.3%
UK: Burberry sales fall 1%
UK: Charles Tyrwhitt relaunches websites to drive international growth
UK: Edinburgh Woollen Mill owner joins bidding for Dobbies
UK: H&M to collaborate with KENZO
UK: Jack Wills to open at intu Milton Keynes
UK: Joules
…eyes a number of Austin Reed stores
…share price soars on stock market debut
UK: Matalan profits tumble 62.5% due to warehouse issues
UK: Monsoon profits tumble 59%
UK: Moss Bros shows further improvement
UK: Mothercare full-year profits up 51%
UK: New Look
…profits increase 7%
…to open largest men’s store to date
UK: Supergroup ends the year with robust trading
UK: Two Bhs suppliers fall into administration
UK: Wolf & Badger launches into beauty and childrenswear
 FOOTWEAR RETAILING
UK: Hush launches ‘pop-in’ concept
UK: Shoe Zone sales fall amid store closures
 MULTI-SECTOR RETAILING
UK: Argos first quarter revenue up 2.6%
UK: B&M sales rise 23.6% as expansion ramps up
UK: Guess How Much! discount store opens its doors
UK: Marks & Spencer
…breaks tradition to stock early Autumn lines
…reports declining profits in ‘mixed’ results
..restructures management team for customer focus
 DEPARTMENT STORES
UK: Harrods introduces personal shopping for men
UK: John Lewis teams up with style guru Jim Chapman
UK: Selfridges launches first shoppable app
 DIY RETAILING
UK: Kingfisher sales grow 5.1%
UK: Topps Tiles revenues rise 3.8%
UK: Wesfarmers ends Homebase's partnership with Nectar
 ELECTRICAL RETAILING
UK: Dixons Carphone ends the year up 5% like-for-like
 FURNITURE AND HOMEWARES RETAILING
UK: Dyson personally designs Oxford Street store
UK: Ikea to open in Westfield Stratford
UK: Lakeland unveils refitted flagship store
UK: Loaf to open second London store
UK: Tiger rebrands to Flying Tiger Copenhagen
UK: West Elm extends partnership with John Lewis
 HOME SHOPPING
UK: Amazon
…begins sale of fresh food through Morrisons tie-up
…launches full fresh food offering
UK: AO World reports 25.7% growth in revenues
UK: Boohoo
…launches first advertising campaign for men
…revenues surge 41%
UK: Debenhams appoints new chief executive
UK: DPD innovates with geo-location technology in app
UK: Gear4Music full year revenues surge 46%
UK: Shop Direct working with TH_NK to update Very site
 HEALTH & BEAUTY RETAILING
UK: Boots campaign highlights healthcare expertise
UK: Estée Lauder launches male grooming station
 BOOK, GREETINGS CARDS AND STATIONERY RETAILING
UK: Card Factory offsets falling footfall with a rise in average spend
UK: Smiggle hires UK property head for store rollout
UK: WH Smith high street sales fall 4% in line with expectations
 SPORTS AND LEISURE GOODS RETAILING
UK: Go Outdoors explores potential sale
UK: Halfords
…acquires online bikes and accessories specialists
…retail sales rise 1.3%
UK: Mountain Warehouse profits rise 36%
UK: Tesla opens experience-led store in shopping centre
 JEWELLERS
UK: Pandora Q1 revenues rise 34%
 GARDEN CENTRES
UK: Edinburgh Woollen Mill owner joins bidding for Dobbies
 TOYS AND GAMES RETAILING
UK: Lego Group to open Leicester Square flagship
 PET SPECIALISTS
UK: Pets at Home like-for-like sales rise 2.1%
 SHOPPING LOCATIONS
UK: Birmingham Bullring launches new pop-up space
UK: Footfall down 2.4% in April
UK: Intu Lakeside ‘re-imagined’ with Nickelodeon theme park
 ECONOMY
UK: One in five payments contactless says Visa
UK: ONS announce 4.3% rise in retail sales
UK: Retail sales fall 0.9% as clothing demand weakens
UK: Retail sales in May lift 1.4%