Weekly Retail & Leisure News - 14 March, 2016
After a generally positive start to the year, momentum has continued in the UK retail market, with February’s LFLs rising 0.1% according to the BRC. On a total basis, sales were up 1.1% compared to last year. Growth was mostly driven by furniture and home accessories again while food, which remains impacted by low prices, as well as clothing and footwear experienced LFL declines. Household spending continues to drive the UK’s economic recovery, helped by near-zero inflation and gradually rising pay.
In other positive news for the sector, John Lewis announced that its LFLs rose 3.1% in the full year to January 31. Despite pension charges and property costs impacting profits, the department store has successfully increased sales by investing in its shops, website and infrastructure. Argos has also invested in its digital and physical offer of late and announced last week that its total sales rose 1.9% in the 8 weeks to February 27. Argos’s LFLs declined by 1.1% in the period, however the cannibalisation impact on LFLs as a result of the additional new space was around 1%. Therefore ‘underlying LFLs’ were broadly flat in the period.
In the grocery sector, Morrisons has announced that total sales in the three months to the end of January rose 0.1%. Annual pre-tax profits rose to £217m up from a £792m loss the previous year; however, full-year LFLs dropped 2% as food prices continued to fall. Continuing food price deflation also affected Waitrose, who announced that despite increasing market share, LFLs were 1.3% down in the year to January 31.
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Director, Head of Retail Research (UK & EMEA)
+44 (0)20 3147 1155
Director, Head of UK Retail & Leisure
+44 (0)20 7318 7838