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UK Retail Briefing - March 2019

ANALYST COMMENT – OCADO AND M&S JOIN FORCES 
Ocado’s eventful start to 2019…
The deal
Where does it leave Waitrose?
What it means for M&S and Ocado
What it means for the sector
UK RETAIL SALES
 KEY POINTS
Retail sales
Figure 1: Retail sales trends, 2018/19
BRC vs ONS
Figure 2: UK retail sales y/y growth, BRC vs ONS, February 2017- February 2019
John Lewis
Figure 3: John Lewis Department Stores: Year-on-Year Growth, Oct 2017- Mar 2019
Inflation
Figure 4: Annual percentage change in the consumer price index for selected product groups, 2018-19
Inflation and wages
Figure 5: Real wages growth: Wages growth vs inflation, Jan 2016- Feb 2019
Consumer confidence
Figure 6: Mintel Financial confidence tracker, January 2016 – January 2019
 LOOKING FORWARD
SECTOR FOCUS – FOOD RETAILING
Value sales growth slows in the second half of 2018
Figure 7: Annual non-seasonally adjusted percentage change in the value sales of food retailers at current prices, January 2018 - January 2019
Food inflation down year-on-year in 2018
Figure 8: Annual percentage change in the price of food and non-alcoholic beverages, January 2018 – January 2019
Sales volume boosted by low sector inflation and real wage growth
Figure 9: Annual non-seasonally adjusted percentage change in the chained volume of goods sold in food stores, Jan 2018 – Jan 2019
Erratic online grocery sales growth in 2018
Figure 10: Internet food sales: value non-seasonally adjusted percentage change YoY, Jan 2018 – Jan 2019
Online food sales as a proportion of all food stores retail sales
Figure 11: Internet food sales: value non-seasonally adjusted internet sales as a proportion of all food retailing Jan 2018 – Jan 2019
Leading supermarkets Christmas sales performance
LAUNCH ACTIVITY AND INNOVATIONS
UK: Co-op launching first ever franchise stores
UK: The Wardrobe Workshop to make bricks-&-mortar debut in Chelsea
UK: M&S and Ocado announce joint venture
HEADLINES FOR THE MONTH
Convenience stores
Grocers
Specialist food & drink retailing
Clothing retailing
Footwear retailing
Department stores
Furniture retailing
Homewares retailing
Sports and leisure goods retailing
Economy
NEWS ANALYSIS – FOOD AND DRINK
 CONVENIENCE STORES
UK: McColl full year pre-tax profit declines due to supply chain issues
 GROCERS
UK: Aldi
…opens £50 million warehouse in Kent
…to scrap 5p plastic bags from all stores nationwide
UK: Asda
…records seventh consecutive quarter of sales growth
…to re-launch its in-store radio station
UK: Iceland
…Christmas sales fall
…eyes up Sainsbury’s and Asda stores ahead of proposed merger
UK: Sainsbury’s-Asda
…merger in doubt
…confirms deadline extension on Sainsburys-Asda probe
UK: Tesco swaps to Rainforest Alliance certified cocoa
UK: Waitrose & Partners
…partnership with Ocado to end September 2020
…to potentially allow shoppers to pick their own fresh produce
…using racing car technology to cut energy consumption in stores
 SPECIALIST FOOD & DRINK RETAILING
UK: Greggs posts exceptionally strong start to 2019
UK: Hotel Chocolat reports increase in first-half profits
UK: Mike Ashley withdraws bid for Patisserie Valerie
NEWS ANALYSIS – CLOTHING AND FOOTWEAR
UK: Anya Hindmarch up for sale
UK: Asics forms new partnership with I:CO
UK: Baroness Brady stands down from position at Sir Philip Green's retail group
UK: Edinburgh Woollen Mill boss Philip Day eyeing up M&S stores
UK: F&F clothing range launched on Next website
UK: Jack Wills
…forms new partnership with independent coffee shop Bear
…swings to a full-year loss
UK: MPs suggest tax on fashion to combat waste
UK: New Look reports 0.9% increase in third quarter UK like-for-like sales
UK: Primark moving over 200 UK roles to Dublin
UK: Quiz issues profit warning
UK: Superdry
…chairman to stand down by year end
…to cut jobs in cost-cutting plan
UK: Ted Baker CEO resigns
 FOOTWEAR RETAILING
UK: Clarks confirms closure of Somerset factory
UK: Dr.Martens investing £2 million into Northampton factory site
UK: LK Bennett
…drafts in advisors for strategic review
…prepares to call in administrators
…files for administration
UK: Office profits hit by House of Fraser collapse
UK: Treds rescued from administration
NEWS ANALYSIS – MIXED GOODS 
UK: Poundland to reinvent its culture and store proposition
 DEPARTMENT STORES
UK: Debenhams
…issues new profits warning
…obtains £40 million cash injection
UK: Harrods launches new luxury podcast
UK: House of Fraser Belfast store safe from closure
UK: John Lewis
…announces JLAB innovation short list
…underlying profits tumble 45.4%
…recognised as a "Disability Confident Leader"
UK: Selfridges pledges to phase out sale of exotic skins by 2020
NEWS ANALYSIS – HOUSEHOLD GOODS
 DIY RETAILING
UK: Wickes profits take a hit
 ELECTRICAL RETAILING
UK: Raspberry Pi opens first physical store
 FURNITURE RETAILING
UK: Better Bathrooms falls into administration
UK: Hammonds ownership back in family hands
UK: IKEA considering selling furniture on third-party websites
UK: Laura Ashley
…confirms it has not received any takeover offers
…warns full year profits will be below market expectations
 HOMEWARES RETAILING
UK: Dunelm posts strong first half results
UK: Joe Browns expanding into homewares
NEWS ANALYSIS – ONLINE
UK: ASOS Gen-Z label COLLUSION exceeds sales expectations
UK: QVC announces partnership with social commerce specialist Curalate
NEWS ANALYSIS – OTHER RETAIL
 HEALTH & BEAUTY RETAILING
UK: Boots
…looks to cut HQ jobs as part of restructure
…trials 10% student discount
UK: The Fragrance Shop to open over 15 Sniff Bar sites
 BOOK AND STATIONERY RETAILING
UK: Paperchase launches CVA
 SPORTS AND LEISURE GOODS RETAILING
UK: Findel rejects Sports Direct takeover
UK: Gymshark announces partnership with Klarna
UK: JD Sports acquires an 8.3% stake in Footasylum
 GARDEN CENTRES
UK: Wyevale sells another two garden centres
 JEWELLERY AND WATCHES RETAILING
UK: TAG Heuer opening first standalone store
 SHOPPING CENTRES
UK: Liverpool Shopping Park obtains planning approval for £30 million expansion
UK: Westfield Croydon construction delayed
NEWS ANALYSIS – ECONOMY
UK: BRC-KPMG: Retail sales dipped in February 2019
UK: MPs propose online sales tax in bid to save the high street
UK: UK retail sales bounce back in January
UK: Westminster Council gives go ahead for Oxford Street renovation

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