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

ANALYST COMMENT: WALMART WAVES GOODBYE TO THE UK AS ASDA FINDS NEW OWNERS 
What we’ve seen
The end of an era for Walmart
Figure 1: Annual % change in all major food retailers sales and Asda, 1998-2018
Figure 2: Asda Supercentre, Watford 2014
Figure 3: Asda click-and-collect, Colindale 2015
The deal and the new owners
Figure 4: EGR Group, Key Company Financials, 2016-19
What will they bring to Asda?
Experience in the forecourt convenience sector
Figure 5: ERG Group Revenue Breakdown, 2019
The full push into convenience?
Figure 6: Google COVID-19 Community Mobility Reports, UK (National), 15 February-27 September 2020
Expanding the multi-mission experience
What it means
UK RETAIL SALES
Retail sales
Figure 7: Retail sales trends, January 2019 – September 2020
BRC vs ONS
Figure 8: UK retail sales y/y growth, BRC vs ONS, January 2018 – September 2020
Inflation
Figure 9: Annual % change in the consumer price index for selected product groups, January 2019 – September 2020
Inflation and wages
Figure 10: Real wages growth: Wages growth vs inflation, January 2016 – September 2020
Consumer confidence
Figure 11: Mintel Financial confidence tracker, January 2019 – June 2020
Looking forward
SECTOR FOCUS – CLOTHING RETAILING
What we have seen
Clothing sales begin to recover
Figure 12: Growth in store based clothing sales, year on year, January 2019- August 2020
Consumers intend to spend less on clothing in the next month
Figure 13: Percentage of consumes who said they intend to spend more, about the same or less in next month on clothing and accessories, 24th September - 1st October
Consumer feel uncomfortable trying on clothes in store
Figure 14: How comfortable consumers are about trying clothes in store, 24th September - 1st October, 2020
LAUNCH ACTIVITY AND INNOVATIONS
UK: Co-op trials app for one-hour deliveries that are eco-friendly
UK: Aldi to trial click-and-collect across the UK for the first time
UK: Homebase unveils its first ‘green aisle’ to help shoppers make sustainable purchases
HEADLINES FOR THE MONTH
Co-ops
Grocers
Clothing retailing
Footwear retailing
Department stores
Furniture retailing
Homewares retailing
Online
Health and beauty retailing
Sports and leisure goods retailing
Jewellers
Toys and games retailing
NEWS ANALYSIS – FOOD AND DRINK
 CO-OPS
UK: Co-op
...sales rise as people shop more locally during COVID-19 crisis
...donates £10,000 worth of supplies to students in self-isolation
 GROCERS
UK: Aldi
...removes single-use plastic for fruit and veg across all 900 UK stores
...to invest £1.3bn into UK stores as profits increase 49%
UK: Asda
...restructures George head office and cuts 50 jobs
...Walmart sells Asda to Issa Brothers in £6.8 billion deal
...offers free NHS flu jabs from Asda car parks
...to trial B&Q shop-in-shops in four superstores and pilot new convenience format
UK: Iceland publishes its own ‘plastic footprint’ and challenged rivals to do the same
UK: Morrisons
...expands delivery service to over 20,000 people in retirement communities
...profits fall due to costs incurred because of COVID-19
...launches home delivery subscription boxes
UK: Sainsbury’s aims for 700,000 weekly online deliveries by end of October
UK: Tesco
...pre-tax-profits jump 28% as shoppers moved online during pandemic
...to trial 30 minute drone delivery service
 OTHER FOOD SPECIALISTS
UK: Hotel Chocolat reports a loss of £6.5 million and announces deal with Hut Group in the US
NEWS ANALYSIS – CLOTHING AND FOOTWEAR
 CLOTHING RETAILING
UK: Ann Summers ‘likely’ to launch CVA if landlords don’t agree to better rent terms
UK: Barbour reveals ‘Wax for Life’ space in Selfridges ‘Project Earth’ area
UK: Burberry
...to livestream Spring/Summer 2021 fashion show
...teams up with students from IBM to create prototype system for product traceability
UK: Joules sales ‘ahead of expectations’ for first quarter
UK: Mulberry losses steepen to £14.2 million amid COVID-19
UK: New look CVA approved moving 400 stores to turnover-based rents
UK: Next
...raises full-year profit guidance to £300 million
...reveals its first beauty hall
...rescue Victoria’s Secret UK arm and saves 500 jobs
UK: Scotch and Soda rental service expands into womenswear
UK: Superdry sales down 19.2% as ‘trading continues to be disrupted’ by COVID-19
UK: Ted Baker
...signs licensing agreement with Next to sell lingerie and nightwear
...reveals its digital pop-up store in collaboration with Creative Mentor Network
...new license partner for men’s formalwear
 FOOTWEAR RETAILING
UK: Aldo UK sold to investment firm saving 700 jobs
UK: Clarks launches CVA as part of rescue deal
NEWS ANALYSIS – MIXED GOODS
 MULTI-SECTOR RETAILING
UK: B&M increases profit forecast following ‘strong’ uplift in sales
UK: Halfords expands its Mobile Expert service
UK: M&S
...celebrates reward app milestone with ‘free shopping’ promotion
...reveals online expansion plans as part of its digital transformation strategy
...to sell third-party fashion online for the first time
UK: Poundland trials alcohol aisles with beers, wines and spirits
 DEPARTMENT STORES
UK: John Lewis
...posts half-year loss and tells staff no bonuses this year
...invests in home departments with new ad campaign and customer magazine
...opens virtual Christmas shop
NEWS ANALYSIS – HOUSEHOLD GOODS
 DIY RETAILING
UK: B&Q ‘reveals ‘Build a Life’ campaign
UK: Topps Tiles confident it will generate ‘modest level of adjusted profit before tax’
 FURNITURE RETAILING
UK: ScS
...profits down 20% due to store closures
...create 300 jobs to cope with online surge
 HOMEWARES RETAILING
UK: Dunelm sales down 3.9% due to COVID-19
NEWS ANALYSIS – ONLINE
UK: Boden reports ‘material impact on sales’
UK: Depop looks to expand UK team due to heightened demand
UK: eBay removes fees for first time sellers as part of ‘Pay As You Grow’ scheme
UK: Eve Sleep to collaborate with Boots on Christmas ranges as it narrows its losses
UK: Made.com reveals pop-up showroom apartment in Leeds
UK: N Brown hails strong performance of homewares as revenues begin to recover
UK: Ocado posts strong sales over quarter and hails ‘positive’ start to its M&S tie-up
UK: Sosandar half-year sales up 52% driven by demand for full-price items during summer
UK: The Very Group sales up 10.5% driven by electricals
NEWS ANALYSIS – OTHER RETAIL
 HEALTH AND BEAUTY RETAILING
UK: Boots to open 10 dedicated Mothercare Zones in selected stores by November
UK: L’Oreal rolls out recycling bins across 1,000 UK stores in new sustainability push
 SPORTS AND LEISURE GOODS RETAILING
UK: Decathlon plans more store openings following a rise in sales
 BOOK AND STATIONERY RETAILING
UK: Card Factory at a half-year loss as COVID-19 hits sales
 JEWELLERS
UK: Watches of Switzerland increases full-year profit guidance as sales rise 12.6%
 TOYS AND GAMES RETAILING
UK: Games Workshop sales up 15.4% to £90m
UK: Lego to phase out plastic packaging following customer pressure

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