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Market Commentary

Weekly Retail & Leisure News - 18 May, 2015

April sales down, but trend remains positive

UK retail sales figures released by the British Retail Consortium (BRC) last week suggest a bleak view of retail in April. However, the timing of Easter has dragged the numbers down. When looking at the three month average, the trend is much more positive with total sales up 1.9%, and both food and non-food showing improving trends. The settled outcome from the election should boost the economic outlook in the UK, which together with the growth of wages above 2% will most likely have a positive impact on consumer confidence in the months to come.

It has been a busy week for corporate acquisitions on the UK high street, showing the continued appeal of UK retail to foreign investment. South African retail billionaire, Christo Wiese, is poised to become one of the most powerful players on the British high street, after acquiring a majority stake in New Look for £780m.

In addition, American private equity company TPG has bought a majority stake in Poundworld, in a further sign of the maturing discount sector in the UK. The new money from TPG will allow Poundworld to speed up its store expansion programme and compete with rival Poundland, which in February announced its proposed acquisition of 99p Stores. Poundworld currently has 280 stores, including the 50 sites trading under its Bargain Buys brand.

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