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Market Commentary

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 16​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ May, 2016​​​​​​​​​​​​​​​​​​

Challenging macro picture for the UK retail market​​

Conditions in the UK retail market remain challenging, as consumer uncertainty grows ahead of the EU referendum. Declining consumer confidence has continued into Q2, and looks to be impacting retail sales and footfall, both of which were down in April. According to the BRC and Springboard, retail footfall in April fell by 2.4% Y-o-Y. High street footfall saw its biggest decline in two years since February 2014, as it fell by 4.7%, following a 3.9% drop in March. Footfall in shopping centres edged down 0.7%, although retail parks saw an uplift of 1.1%.

Retail sales were also down in April, according to the BRC, with LFLs falling by 0.9% Y-o-Y. Total retail spending was flat, although this is compared to a fall of 1.3% a year ago. Home accessories sales were the top performer, profiting from a buoyant housing market. Over the three months to April, total food revenue fell by 0.2% compared to a year ago, while LFLs were down 1.7% in the same period, as the supermarket price war continues to grip the sector. Fashion and footwear sales were particularly weak in April, as the cooler weather dampened the launch of spring/summer ranges.

However, strong retailers with robust strategies and customer propositions continue to demonstrate growth. Superdry’s parent company, SuperGroup, for instance, has reported that LFL sales were up 11% in the year to April 23, and pre-tax underlying profit is expected to be up £63m to between £72.5m-74m. The positive results are partly due to Superdry’s ‘transeasonal’ ranges, which make sales resilient to changing weather and consumers’ shifting shopping habits. Sales have also been driven by the retailer’s recent successful international expansion, particularly across Western Europe.

To discover more about successful international retailer expansion strategies, please register for JLL’s latest global report, Destination Retail 2016​.

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