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UK Retail Briefing - November 2018

ANALYST COMMENT – COULD RENTING BE THE FUTURE OF THE FASHION INDUSTRY?
What we've seen
Renting fashion becomes more mainstream
Figure 1: Westfield Style Trial Pop-Up, 2017
How often do people buy clothing?
Figure 2: Frequency of clothing purchases in the last 12 months, August 2017 and August 2018
Sentiment towards fashion rentals
Barriers to entry
What it means
UK RETAIL SALES
Key points
Retail sales
Figure 3: Retail sales trends, 2017/18
Figure 4: UK retail sales y/y growth, BRC vs ONS, July 2016-September 2018
John Lewis
Figure 5: John Lewis Department Stores: year-on-year growth, Aug 2017-Nov 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-Jul 2018
Confidence
Figure 8: Mintel financial confidence tracker, January 2016-September 2018
Looking forward
SECTOR FOCUS – CLOTHING AND FOOTWEAR
Footwear and clothing specialists underperforming
Figure 9: Annual % change in value clothing and footwear retail sales, non-seasonally adjusted, by month, Jan 2017-Oct 2018
Figure 10: Annual % change in volume clothing and footwear retail sales, non-seasonally adjusted, by month, Jan 2017-Oct 2018
Inflation
Figure 11: CPI: Annual % change in the price of clothing and footwear (incl. repairs), Jan 2017-Oct 2018
Consumer spending slows down in 2018
Figure 12: Consumer spending on clothing and footwear, at current prices, non-seasonally adjusted, Q1 2017-Q2 2018
Customer loyalty is low
Figure 13: Loyalty behaviours towards shopping for clothes, July 2017
LAUNCH ACTIVITY AND INNOVATIONS
UK: Sainsbury’s and Oasis planning concession partnership
UK: M&S launches interactive sea map
UK: M&S launches new Social Plastic reusable bag
UK: John Lewis introducing after-hours private shopping service
UK: Selfridges unveils new innovative menswear floor
UK: IKEA launches first inner-city store in London
UK: Waterstones unveils new store concept
HEADLINES FOR THE MONTH
Co-ops
Grocers
Clothing retailing
Mixed goods retailing
Multi-sector retailing
Department stores
DIY retailing
Music and video goods retailing
Furniture retailing
NEWS ANALYSIS – FOOD AND DRINK
 CO-OPS
UK: Co-op
…acquiring former Waitrose stores
…new £45 million distribution centre to create 1,200 jobs
 GROCERS
UK: Asda staff shake-up could lead to 2,500 job cuts
UK: Booths narrows its losses
UK: M&S appoints new leadership team for food business
UK: Morrisons third quarter sales up but retail growth slows
UK: Percol unveils UK’s first plastic-free coffee packaging
UK: Sainsbury’s
…half year results boosted by Argos takeover
…CMA investigation into Sainsbury’s-Asda merger to factor in Aldi and Lidl’s impact
UK: Waitrose & Partners Food & Drink Report reveals latest trends
NEWS ANALYSIS – CLOTHING AND FOOTWEAR
UK: Burberry profits surge 36% despite sales drop
UK: Coach the latest luxury house to ban the use of real fur
UK: Coast bought out of administration by Karen Millen
UK: Eleanor Tomlinson new brand ambassador for Radley London
UK: End opens first London store in Soho
UK: Fat Face appoints Oasis and Warehouse chief Liz Evans as new CEO
UK: French Connection begins sale talks
UK: Jaeger to triple store network by end of 2019
UK: John Smedley opens third UK standalone store
UK: Karen Millen puts 100 jobs at risk
UK: Mulberry sales hit by House of Fraser administration
UK: New Look
…could lose more UK stores
…exiting the Chinese market
…half year results show a return to profitability
UK: Next sales up 2% in Q3
UK: Oasis and Warehouse hit by credit insurers move
UK: Primark achieves strong full year performance in the UK
UK: QUIZ opens flagship store at Liverpool ONE
UK: Reiss profits drop 26%
UK: Sandro opening a menswear flagship store on Regent Street
UK: Seasalt reports 23% increase in full-year sales
UK: Superdry
…first half sales affected by summer heatwave
…issues profit warning
UK: Ted Baker launches first advertising campaign
UK: TK Maxx FY sales increase 11%
UK: Zara UK reports soaring profits
 FOOTWEAR
UK: Footasylum
…experiences difficulty in second half trading
…credit insurance cut by numerous companies
UK: Schuh profits fall 9.6%
UK: Shoe Zone reports strong second half performance
NEWS ANALYSIS – MIXED GOODS 
UK: Home Bargains sales surpass £2 billion
UK: The Range posts falling profits
UK: Wilko swings to red
 MULTI-SECTOR
UK: Halfords profits drop but sales rise in interim results
UK: M&S
…appoints new leadership team for food business
…expected to report a double digit drop in profits in interim results
…interim results reveal a sales decline across both divisions
UK: Mothercare cuts 200 jobs
 DEPARTMENT STORES
UK: Debenhams
…to close up to 50 stores over the next three to five years
…to potentially close one third of its stores
…retail and digital managing director resigns
UK: House of Fraser
…buys Glasgow store to create ‘Harrods of the North’
…closing iconic Manchester store
UK: John Lewis
…JLAB innovation programmes launches retail experience challenge
…announces ambitious plan for reducing HGV emissions
…begins search for new Chairman
…Cheltenham store opens today
NEWS ANALYSIS – HOUSEHOLD GOODS
 DIY RETAILING
UK: B&Q pulling out of Black Friday
UK: Homebase announces further store closures
UK: Travis Perkins report solid trading for Q3 2018
 MUSIC AND VIDEO GOODS RETAILING
UK: HMV overtakes Amazon as UK’s biggest seller of physical music
 CARPET RETAILING
UK: Carpetright sales dented by CVA store closures
 FURNITURE RETAILING
UK: Bensons for Beds partners with sleep expert
UK: IKEA UK sales boosted by store openings and digital growth
UK: ScS Group to pull out of House of Fraser concessions
 HOMEWARES RETAILING
UK: Dunelm posts flat quarterly revenue
NEWS ANALYSIS – ONLINE 
UK: Amazon
…launches Prime Wardrobe in the UK
…to create 1,000 technology jobs in three UK cities
…to open fashion pop-up on Baker Street
UK: AO World to acquire Mobile Phones Direct
UK: Moonpig to open Manchester tech hub
UK: Musclefood undergoes major rebrand
UK: N Brown reports first-half losses
UK: Shop Direct planning to shut outlet arm
UK: Sosandar expects to report 407% increase in half year revenue
NEWS ANALYSIS – OTHER RETAIL
 HEALTH & BEAUTY RETAILING
UK: Boots fourth quarter sales fall
 BOOK AND STATIONERY RETAILING
UK: Paperchase reports falling profits
UK: The Works reports 15% sales rise in first update since IPO
UK: WHSmith
…acquires InMotion for £155 million
…announce store closures following detailed review
 SPORTS AND LEISURE GOODS RETAILING
UK: Sports Direct acquires Evans Cycles
 JEWELLERS
UK: Claire’s stores under threat of closure
 SHOPPING CENTRES
UK: Bond Street completes £10 million transformation
UK: 02 Icon Outlet opens its doors
 TOYS AND GAMES RETAILING
UK: GAME narrows annual losses
UK: Hamleys
…appoint new finance chief
…profits dive to £12 million loss
NEWS ANALYSIS – ECONOMY
UK: October retail sales growth up just 0.1%
UK: September retail sales up by 4.2%

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