Weekly Retail & Leisure News - 20 March, 2017
Philip Hammond delivered his first budget as chancellor last week. The announcement included help for firms hit by business rate rises, higher taxes for self-employed and £2bn for social care services in England. The Chancellor also commented that economic growth is expected to be higher than the previous November forecast. In response to the Chancellor’s three proposed measures designed to ease the burden of business rates across the country, JLL’s Head of Rating, Tim Beattie, commented: “This will provide no real comfort and is a missed opportunity to implement the changes that are urgently required. He has largely ignored the impact on London, which will still see large increases in both the retail and office sectors for most businesses.”
As highlighted last week, pressures continue to mount on the UK consumer. The BRC’s latest figures show the first decline in non-food sales since 2011, with LFLs down 0.4% in February YoY. Consumer confidence is showing signs of weakening and inflation is starting to have an impact on retail performance. Commenting on the London retail market, JLL’s Duncan Gilliard, Central London Retail Agency Director said, “We cannot deny that there are some serious headwinds in store for London retailers. Those innovative retailers with customer-focused digital strategies, strong cost management and a well-located store portfolio will continue to thrive in spite of these challenges.”
Despite the uncertain market, Morrisons and John Lewis have both reported strong full year results. Morrisons’ LFLs grew 1.7% in the year to January 29, while total revenues rose 1.2% to £16.3bn - profits jumped 11.6% last year to £337m. LFLs at John Lewis rose 2.7% in the year to January 28, total sales rose 3.2% to £11.4bn, and profits jumped 21.2% to £370.4m. A 1% decline in physical store sales reflects the ongoing structural issues faced by UK retailers - John Lewis is continuing to invest significantly in in-store technology to prevent a further weakening in store performance, however. LFLs at Waitrose fell 0.2% during the year, while profits rose 9%.
A representative will be in contact with you shortly.
If you would like to read more of our market commentary and gain further insight into the UK retail and leisure market, sign up for our weekly newsletter, delivered to your inbox every Monday afternoon. Preview email
Director, Head of Retail Research (UK & EMEA)
+44 (0)20 3147 1155
Director, Head of UK Retail & Leisure
+44 (0)20 7318 7838