The requested news item does not exist. Please return to News
With an underlying economic recovery seemingly underway, coupled with a marked improvement in consumer confidence, the UK retail market appears to be showing signs of a sustained recovery. JLL's annual Christmas trading update has found that over 90% of UK retailers that have disclosed performance figures for the key Christmas trading period have registered positive like for like (LFL) annual growth. JLL has also identified that around 40% of retailers delivered LFL growth in excess of 10% year on year.
As predicted, the clear winners were retailers who have an increasingly seamless, multi-channel offer. Specifically, click-and-collect has emerged as the true rising star. For some, growth will have been achieved at the expense of profitability, as a number of retailers lost their nerve and discounted early. However, figures would suggest that those retailers that did hold their nerve, were not penalised for doing so.
While conditions remain challenging for many, UK retail appears to be gaining strength. The ONS has announced that December's retail sales were up 5.3% on a year ago, the fastest annual sales growth in more than nine years. So, it appears that even the torrential rain witnessed over the Christmas period could not dampen retailer fortunes this time around. Here's to 2014!
As previously reported, department stores, John Lewis, House of Fraser and Next, were among the big winners of the Christmas trading period, while Debenhams and Marks and Spencer have both admitted to having disappointing Christmas trading figures. John Lewis recorded a 7.2% sales jump to £734m in the five weeks to December 28, with LFLs up by 6.9%. Shop sales jumped 1.2% and online sales surged 22.6% year on year (click-and-collect orders soared 61.8% on last year). Johnlewis.com accounted for 31.8% of the total John Lewis business in the period.
In the grocery sector, which we highlighted last week, the “big four” supermarkets are all losing market share for the first time on record as discount and premium retailers attract UK shoppers. German chain Aldi said it had its busiest Christmas in the UK with sales reportedly rising 29.4%. Lidl also revealed it had enjoyed its best ever Christmas performance, with sales reportedly increasing by 17.5%. Waitrose revealed that for the five weeks to December 24 underlying LFLs excluding fuel were up 3.1%. Consumers sought premium food and utilised the grocer’s strong multichannel offer, with 619,000 click-and-collect orders helping drive footfall. Meanwhile, the chief executive of J Sainsbury, noted that Christmas 2013 was the toughest in his 30-year retail career. Despite this competitive climate, Sainsbury’s still managed to report a 36th consecutive quarter of sales growth with a 0.2% increase in LFLs.
In the fashion sector, there was a clear correlation between retailers' positive figures and the strength of their multi-channel offer. Jaeger (23%), Jigsaw (17%), Burberry (12%) and White Stuff (7.3%) all reported positive LFLs, driven by strong online and digital growth particularly in click and collect, which is a key plank of their multi-channel strategy.
In the electronics sector, Game recorded staggering 90% LFL growth (inc. 213% online growth), spurred by the launch of two new gaming consoles. Dixons Retail and Maplin both also achieved positive LFLs of 5%, illustrating that despite fierce competition from online, there is still demand for electronic goods retailers on the UK high street.
Colin Burnet - Director, EMEA Retail Research
+44 (0)207 087 1185