UK Retail Briefing - June 2006

ANALYST COMMENT
 TOO MUCH SPACE
Out-of-town
Homewares
Woolworths
A deeper malaise
A problem that will not go away
THE MONTH IN UK RETAILING
 CO-OPS (RETAIL)
Co-op drops Homestores
 CONVENIENCE STORES
Members delay Nisa/Costcutter merger
 GROCERS
Aldi offers American food range
Tesco
…sees growth continues in Q1
…and expands computer offering
Asda
…sees George Home beat expectations
…as it battles with strike action
…as staff vote in favour
…and considers bussing in workers
Sainsbury’s
…receives World Cup boost
…and is launching men only zones
Spar plans international expansion
Waitrose launches ugly fruit range
 OFF-LICENCES
Another Majestic year
 CLOTHING RETAILING
Adams goes online
Arcadia hit by disabled access legal action
Austin Reed reveals positive trading
Peacocks set for expansion
Mosaic buys Rubicon for £353m
Mulberry continues to shine
New Look
…squeezes suppliers ahead of results
…is ahead despite tough UK
…but holds off on internet sales
Officers Club furthers expansion
 MULTI-SECTOR RETAILING
M&S to launch upmarket furnishings range
Woolworths continues to struggle
 DEPARTMENT STORES
Beales H1 profits almost double
House of Fraser
…Baugur confirms talks
…HoF informally approves offer
…but like-for-likes fall
John Lewis boosted by TV sales
 DIY RETAILING
Wickes rolls out installation service
 FURNITURE RETAILING
MFI receives bids for retail arm
Ikea begins charging for bags
 HOMEWARES RETAILING
GHCL acquires Rosebys for $40m
 HOME SHOPPING
M and M direct posts full-year sales rise
Empire Direct increases bricks & mortar presence
Findel buys Letterbox
Ideal buys Superstore TV
 HEALTH AND BEAUTY RETAILING
OFT accepts Boots undertakings
Boots reveals cost of merger
United Co-op acquires pharmacy group
 BOOK AND STATIONERY RETAILING
Ottakar’s
…gets higher HMV bid
…and accepts it
 SPORTS AND LEISURE GOODS RETAILING
Lifestyle sees turnover, gross profits rise
Sports World owner buys Original Shoe
 JEWELLERS
US ensures first quarter success for Signet
Theo Fennell shines over full year
 MISCELLANEOUS SPECIALISTS
Halfords profits from in-car accessories
EXECUTIVE APPOINTMENTS
Management shake-up for Boots
Tesco
…secures electrical executive
…and appoints new book buyer
John Lewis ends finance director search
Morrisons
…sees Meakins drop off shortlist
…and appoints new chief executive
Charlton joins Austin Reed as new FD
Baugur shows MK One chief the door
Laura Ashley appoints finance director
Wyevale rings in management changes
Bhs appoint to re-establish image
Firetrap appoint UK sales head
Joseph appoint director
Jessops appoints commercial director
Marketing manager appointed at Ikea UK
M&S appoint Vodafone director
New Look reshape management team
Thorntons appoint chairman
Waterstone's cover with Adar
Sainsbury’s appoint impulse unit head
Oddbins appoints MD
PRODUCT DEVELOPMENT – FRUIT AND VEGETABLES
 MARKS & SPENCER
 MORRISONS
 SAINSBURY’S
 SOMERFIELD
 TESCO
 WAITROSE
ADVERTISING NEWS
 NEW CAMPAIGNS
Ann Summers parodies 1966 and all that
Madonna set to replace Kate Moss
Tesco boosts labelling system
Frangelico sampled in Waitrose
Sainsbury's backs “Active Kids”
Lloyds launches charity sun cream campaign
Sainsbury's shouts out for consumers recipes
 ACCOUNT GAINS/LOSSES
Gap gets Naked
Arcadia looks for DM card taskmaster
Waitrose gives MG OMD ad account
Spar shifts strategy away from TV ads
Mamas & Papas searches for ad agency
IKEA seeks CRM agency
Ocado reviews ad account
Littlewoods reviews creative account
Co-op Group appoints Mercer for pension scheme
Foot Locker hires Frank PR
Topps Tiles to offer TradePro card payment
ELC looks to reposition
Mosaic seeking advertising agency
Craik Jones to handle Arcadia credit card DM task
WDMP takes Habitat integrated brief
French Connection breaks Beattie bond
Thresher Group appoint for marketing
BDHrepitching for Morrisons
RETAIL ADVERTISING REVIEW
 ADVERTISING EXPENDITURE
Figure 1: Total advertising expenditure by all advertisers (£m), Apr 2002-Apr 2006
Figure 2: Total advertising expenditure by all retail advertisers (£m), Apr 2002-Apr 2006
Use of media
Figure 3: Use of media by retail and all advertisers (%), Apr 2005 and Apr 2006
Figure 4: Use of media by retail and all advertisers (£m), Apr 2005 and Apr 2006
 TOP 25 RETAIL ADVERTISERS
Figure 5: Top 25 retailers by adspend (£), Mar 2006-Apr 2006
Furniture
Food
DIY
Other
Nielsen Media Research/Definitions
RETAIL SALES AND INFLATION
 RETAIL SALES
Office for National Statistics
Figure 6: Retail sales trends: May 2005-May 2006
Figure 7: Non seasonally adjusted % value change on previous year, Apr 2005-Apr 2006
Figure 8: Seasonally adjusted % volume change on previous year, Apr 2005-Apr 2006
Significant features of the latest ONS statistics
Confederation of British Industry
British Retail Consortium/KPMG
 RETAIL PRICE INFLATION TRENDS
Figure 9: Annual percentage change in retail price index for selected product groups: May 2005-May 2006
Figure 10: Annual percentage change in retail price index for selected product groups: May 2005-May 2006
Retail Prices Index
Consumer Prices Index
British Retail Consortium: Shop Price Index
SECTOR ANALYSIS – ELECTRICALS
 SALES TRENDS
Figure 11: Electrical specialist retailers, sales trends, 1998-2006 Q1
Figure 12: Electrical retailers as % of all retail sales: 1998-2005
 RETAIL PRICE INFLATION
Figure 13: Indices of retail prices for product categories, 2000-06 (Jan 1987=100)
 CONSUMER EXPENDITURE
Figure 14: Consumer expenditure on selected product categories (£m), 1998-2005
 ELECTRICAL RETAILERS: LATEST TRENDS
Figure 15: Electrical retailers, 2005
SECTOR NEWS REVIEW: ELECTRICAL RETAILING
January
Kesa stutters at Christmas
DSG
…pilots Dixons Warehouse
…and sees good Christmas, worse half-year
February
DSG International
…drops Dixons XL
…but looks to pick up Dabs.com
Powerhouse
…pulls out of Scotland
…and announces CVA to drop shops
March
PC World ends individual commission
Kesa
…rebuffs prospective offer
…and sees full-year profit fall
April
DSG
…moves Dixons brand online
…and snaps up Pixmania
Jessops updates trading, announces Hine’s departure
3 in major store expansion
May
BT buys Dabs
DSG posts second-half surge
Kesa
…boosted by World Cup sales
…and receives improved bid
June
Jessops appoints commercial director
Tesco expands computer offering
DSG
…to slash management jobs at Currys
…considers Link sell-off
…sees profit fall and confirms The Link sale
SECTOR ADVERTISING REVIEW – ELECTRICALS
 ADVERTISING EXPENDITURE
Figure 16: Total advertising expenditure by electrical retailers, April 2002-April 2006
 USE OF MEDIA
Figure 17: Use of media by electrical retailers and all retailers (%), April 2005 and April 2006
Figure 18: Use of media by electrical retailers and all retailers (£m), April 2005 and April 2006
 TOP TEN ELECTRICAL RETAIL ADVERTISERS
Figure 19: Top ten electrical retailers by adspend, April 2005 and April 2006
 RETAILER FOCUS
PC World
Figure 20: PC World, media use by adspend and as share of total, April 2005-April 2006
Figure 21: PC World, top brands by adspend, April 2006
Currys
Figure 22: Currys, media use by adspend and as share of total, April 2005-April 2006
Figure 23: Currys, top five brands by adspend, April 2006
Comet
Figure 24: Comet, media use by adspend and as share of total, April 2005-April 2006
Figure 25: Comet, top five brands by adspend, April 2006
Dixons
Figure 26: Dixons, media use by adspend and as share of total, April 2005-April 2006
Figure 27: Dixons, top five brands by adspend, April 2006
Nielsen Media Research/Definitions
REPORT FOCUS: GARDEN PRODUCTS RETAILING
British weather hasn’t been kind to the garden products market
 CONSUMERS: WHO, WHERE AND WHY
Figure 28: All retail sales and consumer expenditure on garden products, at current prices, 2000-06
Figure 29: All retail sales and consumer expenditure on garden products, at constant 2000 prices, 2000-06
Consumer expenditure
Figure 30: Total expenditure on garden products, 2000/01-2004/05
Figure 31: Estimated household expenditure on garden products, at current and constant 2001 prices, 2001-06
Further breakdown and analysis of sales
 PROFILES OF GARDEN PRODUCT RETAILERS
Figure 32: Leading garden product retailers, by number of outlets, 2002-06
Figure 33: Leading garden product retailers, by average turnover per outlet, 2004
Wyevale
Figure 34: Wyevale, financial performance, 2001-05
Dobbies
Figure 35: Dobbies Garden Centres plc, financial performance, 2001-05
Klondyke Garden Centres
Figure 36: Klondyke Group Ltd, financial performance, 2001-04
Notcutts
Figure 37: Notcutts Ltd, financial performance, 2000-04
Hillier Nurseries
Figure 38: Hillier Nurseries Group Ltd, financial performance, 2001-05
Squire’s
Figure 39: DJ Squire &Co Ltd, financial performance, 2001-05
 INDUSTRY VIEWS
Impact of the British weather on sales
Initiative to beat the weather impact
How to attract the next generation into gardening
Strike a pose
 FORECAST
Figure 40: Forecast of the UK market for garden products, by value, 2006-11
Figure 41: Indexed development of garden products, 2006-11