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UK Retail Briefing: Inc Impact of COVID-19 - September 2020

ANALYST COMMENT – THE PROSPECTS FOR CHRISTMAS 2020 
Our approach
Retail sales so far
Figure 1: First eight month % change, and July-August % change, in retail sales by category, Jan-August 2020
Figure 2: Online sales: annual % change in online sales, by month and type of retailer, Jan-Aug 2020
The significant hit to confidence
Figure 3: The Financial Confidence index, Jan 2017-Sep 2020
Figure 4: Financial activity index, Jan 1-Sep 20
Figure 5: Current financial position compared to one year ago, September 2020
The prospects for the final quarter
There is a willingness to enjoy the festive period
Figure 6: Intention for Christmas food and drink spending, August 2020
Retailers will need to push consumers into earlier habits
Figure 7: Google Trends: key word “Christmas Gifts”, August-October 2019/20
Figure 8: When gift buyers began their shopping, December 2019
Online will play a greater role than ever, hitting those without an online presence
Figure 9: Click it Local, September 2020
The (initial) forecast for Christmas
Figure 10: Estimated annual % change in retail sales in November and December 2020
UK RETAIL SALES
Key points
Retail sales
Figure 11: Retail sales trends, January 2019-August 2020
BRC vs ONS
Figure 12: UK retail sales y/y growth, BRC vs ONS, January 2018-August 2020
Inflation
Figure 13: Annual % change in the consumer price index for selected product groups, May 2019-August 2020
Inflation and wages
Figure 14: Real wages growth: wages growth vs inflation, January 2016-August 2020
Consumer confidence
Figure 15: Mintel financial confidence tracker, January 2019-August 2020
Looking forward
SECTOR FOCUS – ONLINE RETAIL 
Online sales slow in July as people emerge from lockdown
Figure 16: All online retail sales (ex-fuel), non-seasonally adjusted, January 2019-August 2020
Household sees uptick as time indoors encourage home improvements
Figure 17: Annual % change in selected online categories, January 2019-August 2020
Retailers tap into the boost in the home improvement sector
LAUNCH ACTIVITY AND INNOVATIONS
UK: Tesco to offer free delivery to Clubcard Plus members
UK: Burberry to launch luxury face masks costing £90
UK: M&S and Ocado tie-up goes live with 6,800 M&S products exclusively available at Ocado
HEADLINES FOR THE MONTH
Co-ops
Convenience stores
Grocers
Other food specialists
Clothing retailing
Footwear retailing
Multi-sector retailing
Department stores
DIY retailing
Furniture retailing
Online
Jewellers
NEWS ANALYSIS – FOOD AND DRINK
 CO-OPS
UK: Co-ops speedy delivery partnership with Deliveroo extended to 400 UK stores
 CONVENIENCE STORES
UK: AF Blakemore debuts online with acquisition of Vegan Store
UK: Sainsbury’s opens its most central store in Leicester Square
 GROCERS
UK: Aldi trials audio prompts to aid blind and partially-sighted customers enter stores safely
UK: Asda plans to expand online delivery capacity to 1 million after online sales double
UK: Iceland creates 3,000 new jobs to cope with surge in online demand
UK: Just Eat sees sales surge during lockdown
UK: Morrisons
…profits fall due to costs incurred because of COVID-19
…to double number of in-store professional florists
UK: Tesco
…to support ‘exceptional’ online growth by creating 16,000 jobs
…helps shoppers cut food waste in new charity tie-up
UK: Waitrose
…links up with Deliveroo in 12-week trial
…to follow Morrisons lead in banning plastic bags
 OTHER FOOD SPECIALISTS
UK: Hotel Chocolat opens ‘drive-to’ outlet
 OFF-LICENCES
UK: Bestway to market off 37 stores across the UK
NEWS ANALYSIS – CLOTHING AND FOOTWEAR
 CLOTHING RETAILING
UK: Ann Summers to negotiate turnover-based rents with landlords after tough year
UK: Burberry secures £573,000 PPE contract from government
UK: Jigsaw to close 13 stores and cut more than 100 jobs as part of approved CVA
UK: Johnston of Elgin reveals new sustainability label
UK: New Look
…launches CVA after securing new financing
…landlords reject New Look proposed CVA which includes turnover-based rent plans
…launches second CVA amid COVID-19
UK: Next to launch beauty stores in former Debenhams sites
UK: Primark
…unleashes fleet of greener delivery trucks
…reports ‘significantly higher’ sales than last year in pre-close update
UK: Quiz secures favourable leasing terms following stores administration
UK: River Island to cut another 350 jobs as it struggles to survive amid COVID-19
UK: TK Maxx owner sees loss of £160 million
UK: Tommy Hilfiger Kids opens at Icon Outlet
UK: Urban Outfitters sees online sales boost Q2 profit
 FOOTWEAR RETAILING
UK: Dr Marten’s sales up 51% despite closures towards the end of its financial year
UK: Hotter receives £2m investment as part of CVA
NEWS ANALYSIS – MIXED GOODS
 MULTI-SECTOR RETAILING
UK: B&M to enter FTSE 100 following strong sales during COVID-19 pandemic
UK: Halfords reports a peak in sales during lockdown but warns of ‘significant uncertainty’ ahead
UK: M&S
…teams up with Doodle to extend click & collect offer
…to make 7,000 redundancies to reflect a ‘clear material shift in trade’ to online
UK: Mothercare seals 10-year franchising deal with Boots
UK: Poundland launches Pep&Co Home in new push towards homeware
 DEPARTMENT STORES
UK: Debenhams
…appoints Hilco as part of its liquidation contingency plan
…cuts 2,500 in a bid to reduce its cost base
UK: Fenwick reports declining sales and expects ‘sizeable’ loss in the coming year
UK: John Lewis
…reveals new vegan and recyclable mattress range
…teams up with furniture rental service Fat Llama
…unveils concession tie-up with US-based brand Peloton
…adds 30 new brands to its A/W range in a bid to ‘modernise’ offer
…and Waitrose pilot virtual queuing technology in stores
UK: Sanderson to open two new stores over the next year
UK: Selfridges
…to ‘change the way’ customers shop with the launch of Project Earth
…Oxfam to open second-hand pop-up at Selfridges
…to sell vertically farmed produce from its own store
NEWS ANALYSIS – HOUSEHOLD GOODS
 DIY RETAILING
UK: Screwfix to open 40 new stores in response to growing demand for convenience
UK: Topps Tiles sales up 13% in final quarter with ‘modest’ profits expected for the year
 ELECTRICAL RETAILING
UK: Dixons Carphone to extend its ShopLive service to include bookable appointments
 FURNITURE RETAILING
UK: DFS
…sees latent demand lead to trading 'significantly ahead of expectations’
…to offload The Sofa Workshops to rival Halo
 HOMEWARES RETAILING
UK: Cox & Cox records 59% y-o-y online growth in Q2 driven by homewares
UK: Dunelm
…performance ‘materially ahead’ of expectations as post-lockdown sales increase
…sales down 3.9% due to COVID-19
NEWS ANALYSIS – ONLINE
UK: Amazon
…and Morrisons expand grocery tie-up to launch ‘Morrisons on Amazon’
…to create 7,000 jobs to meet growing online demand
UK: AO.com post ‘strong’ sales but remains cautious with Brexit to come
UK: Asos expects profits to beat expectations
UK: Boden reports ‘material impact on sales’
UK: Eve Sleep raises full-year revenue expectation
UK: Sosandar sees revenues soar 103% to £9 million
UK: The Hut Group targets valuation of £4.5bn in IPO
NEWS ANALYSIS – OTHER RETAIL
 BOOK AND STATIONERY RETAILING
UK: The Works at a pre-tax loss as COVID-19 has ‘significant impact’ on performance
 JEWELLERS
UK: LVMH
…and Tiffany & Co extend deadline to close £12 billion deal
…pulls out of Tiffany & Co deal
 SPORTS AND LEISURE GOODS RETAILING
UK: Frasers Group
…delays results for the second year running
…results show pre-tax profits are down 19.9%
…rescues DW Sports in £37 million deal
UK: Gymshark secures new investor General Atlantic for further growth and international expansion
UK: JD Sports pre-tax profits slump 61% as a result of shifting revenues to fulfill online orders
NEWS ANALYSIS – ECONOMY
UK: Government announce ‘bounce back’ plan for retail industry
UK: July retail sales continue their recovery from June and grow 2.7%
UK: BRC-KPMG
…August retail sales up 4.7%
…July retail sales recover as lockdown restrictions ease up

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