UK Retail Briefing - May 2018

ANALYST COMMENT – ANOTHER PARLIAMENTARY INVESTIGATION
Are the high streets in decline?
Figure 1: Major sectors growth in 2017
Figure 2: Major sectors share of all retail sales, 2017
But what about all these retail failures?
Fashion – Rabbits in the headlights
What do we mean by online?
Where next for online?
Book shops
Electricals
And so what about the high street?
Consumers rule
UK RETAIL SALES
Key points
Retail sales
Figure 3: Retail sales trends, 2016/17
Figure 4: UK retail sales y/y growth, BRC vs ONS, 2016-2018
John Lewis
Figure 5: John Lewis Department Stores: Year-on-Year Growth, Apr 2017- May 2018
Inflation
Figure 6: Annual percentage change in the consumer price index for selected product groups, 2016-17
Inflation and wages
Figure 7: Real wages growth: Wages growth vs inflation, Jan 2015- Apr 2018
Confidence
Figure 8: Mintel Financial confidence tracker, January 2016 – April 2018
Looking forward
SECTOR FOCUS – DIY RETAILING
Value sales remain volatile…
Figure 9: Annual non-seasonally adjusted percentage change in the value sales of hardware, paints and glass retailers and all retail sales at current prices, Mar 2017-Mar 2018
…as does volume
Figure 10: Annual non-seasonally adjusted percentage change in the volume sales of hardware, paints and glass retailers and all retail sales at current prices, Mar 2017-Mar 2018
Prices of DIY soar
Figure 11: Annual percentage change in the price of tools and equipment for house and garden and overall inflation, Jul 2017-Mar 2018
Housing market declining
Figure 12: Net of all Home improvement projects undertaken, by length of stay in current home, March 2018
Figure 13: Number of residential property transactions £40,000 or above, by month, Oct 2016-Mar 2018
Major players
Bunnings/Homebase
Wickes (Travis Perkins)
B&Q and Screwfix (Kingfisher Group)
INNOVATIONS AND LAUNCH ACTIVITY
UK: Amazon buys UK rights to US Open tennis tournament
UK: B&Q considers moving onto the high street
UK: H&M to collaborate with MOSCHINO
UK: Iceland launches first online store in China on JD.com
HEADLINES FOR THE MONTH
Food and Drink
Clothing and Footwear
Home and Household Goods
Online
Other Retailing
Economy
NEWS ANALYSIS – FOOD AND DRINK
UK: Co-op…
…launches new mobile site to help staff manage shifts online
…takeover of Nisa given green light by watchdog
…trials robot delivery in Milton Keynes
UK: Holland & Barrett sales rise as profits fall over 2017
UK: Greggs sales up but outlook remains cautious
UK: Iceland to cut palm oil from all own-brand products
UK: Majestic Wine accelerates growth plans
UK: Marks & Spencer…
…launches new in-store marketing campaign
…to close Warrington distribution centre
UK: Merchant Gourmet launches pop-up in Waitrose store
UK: Morrisons sales up 3.6% in Q1
UK: Nisa…
…Former Tesco boss becomes new Nisa CEO
…sales up thanks to store acquisitions from Palmer & Harvey
UK: Sainsbury’s…
…drops project to halve household food waste
…offers ‘touch-free’ meat packaging
…sales up 9% in 2017
…trials London delivery with electric cargo bikes
…and Asda propose merger
UK: Tesco…
…launches smaller wine bottles aimed at millenials
…produces juices made from ‘wonky’ produce
…profits soar in 2017
UK: Waitrose to remove all disposable coffee cups by autumn 2018
NEWS ANALYSIS – CLOTHING AND FOOTWEAR
UK: American Apparel to relaunch in the UK
UK: app for recycling unwanted clothes in exchange for discounts launches
UK: Bench calls in administrators
UK: boohoo profit up 40% over 2017 as revenue soars
UK: Bonmarché store sales fall as online rises in 2017
UK: Burberry to examine fur policy
UK: Christo Wiese steps down from New Look board
UK: East to cease trading in May after failing to find a buyer
UK: French Connection to sell Toast brand
UK: Jacques Vert and Precis owner set to appoint administrators
UK: JD Sports…
…opens store in airport
…sales and profits soar over 2017
UK: Mothercare sales fall as footfall suffers in Q4
UK: N Brown…
…sales edge up as profit falls in 2017
…to stock Quiz range
UK: new concept store to support emerging designers opens in London
UK: New Look sees credit insurance cut
UK: Next first quarter sales rise 6%
UK: Primark profits hold firm as like-for-likes fall in H1
UK: Quiz…
…expands into menswear
…sales grow 30% in 2017
UK: River Island to launch an online third-party brand store
UK: Select opts for CVA and says no stores will be closed
UK: Simply Be unveils customer rewards scheme
UK: Yours Clothing revenue rises 22% over 2017
NEWS ANALYSIS – HOME AND HOUSEHOLD GOODS
 CARPET RETAILING
UK: Carpetright…
…creditors approve CVA and close 81 stores
…issues profit warning and shareholders approve CVA
…to close 92 stores as part of proposed CVA
…hedge fund doubles Carpetright stake ahead of CVA vote
UK: Tapi in talks to buy Carpetright stores
 DIY RETAILING
UK: Bunnings UK sales fall 13.5% in Q3
UK: Homebase…
…former Comet owner targets Homebase
…sale advertised with gift to entice bidders
UK: Travis Perkins sales up in Q1
 ELECTRICAL RETAILING
UK: Alex Baldock enacts changes at the top of Dixons Carphone
UK: Jessops launches new store format
UK: Mike Ashley now GAME’s largest single shareholder
 HOMEWARES RETAILING
UK: Dunelm revenue rises in Q3
UK: House opens first three stores in the UK
NEWS ANALYSIS – ONLINE
UK: ASOS…
…sales up 27% as it passes one billion site visits
…to launch own-brand homewares range
UK: click-and-collect company Doddle launches Facebook chatbot for returns
UK: Kleeneze enters administration
UK: Ocado partners with Swedish grocer ICA
UK: Swoon…
…launches pop-up shop amid brand overhaul
…sales grow 83% in 2017
NEWS ANALYSIS – OTHER RETAILING
 BOOK AND STATIONERY RETAILING
UK: Card Factory profits down over 2017
UK: Waterstones sold to Elliott Advisors
UK: WH Smith sales remain flat despite strong travel performance in H1
 DEPARTMENT STORES
UK: Debenhams…
…suffers severe profit loss of 85% over first half year
…to offer a global money transfer service
UK: Harrods inaugurates its first luxury charity shop
UK: House of Fraser…
…drafts in KPMG to help with restructuring
…to close stores as part of CVA
…to launch premium Chinese brands
UK: John Lewis runs year-long start-up incubator
UK: Selfridges launches first cinema advertising campaign
 GARDEN RETAILING
UK: Carol Paris receives backing to set up new garden centre group
UK: Cherry Lane acquires David’s Nurseries
 HEALTH & BEAUTY RETAILING
UK: FeelUnique introduces pre-orders for cult beauty products
UK: The Fragrance Shop sales increase 6% over 2017
 MIXED GOODS RETAILERS
UK: Tofs to close stores as part of turnaround plan
UK: Argos adds 150 new tech roles in London and Milton Keynes
UK: Poundworld considers closing up to 100 stores
 PET PRODUCT RETAILING
UK: Love My Human opens first physical store
 SHOPPING CENTRES
UK: Hammerson…
…rejects latest Klepierre takeover offer
…withdraws Intu takeover bid
NEWS ANALYSIS – ECONOMY
UK: April retail sales fall 3.1%
UK: footfall at lowest levels since end of 2010
UK: grocery regulator gives tentative green light to Sainsbury’s/Asda merger
UK: March retail sales up despite poor weather
UK: shop prices fall in April