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Market Commentary

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 10 February, 2017

​​​Clicks moving to bricks​​​​​​

Following the opening of its first physical store in Seattle last year, Amazon is now reportedly on the hunt for a prime high street location in central London, ahead of the potential launch of a checkout-free grocery chain later this year. Amazon’s UK launch would introduce a new way of shopping for the UK customer, meeting demand for more in-store technology and convenience. Despite the fact that UK is one of the most advanced online retail markets in the world, the value of the right physical space remains as strong as ever. In fact, online retailers are recognising the importance of physical stores globally - JLL has tracked reports of c.200 e-tailers taking physical space around the world. In the US, JLL’s latest research report Screens to Stores​, analysed 51 notable US e-tailers that have translated their brand offline, across four distinct phases of brand evolution.

Further evidence of the growing need for seamless digital strategies comes from the most recent BRC Google Online Retail Monitor. Overseas customer searches for UK retailers grew 23% in Q4 2016; Fashion was the most searched for sector by overseas consumers on mobile devices, with an increase of 64%, followed by beauty, up 50%. In the UK, search volumes on mobile devices increased 16%, highlighting the importance for retailers to focus on user experience and a tailored e-commerce offer. The trend was also reflected over the Christmas season, when retailers who embraced omni-channel and digital, continued to thrive.

And finally, after the announcement of the merger with Booker, Tesco may be forced to dispose of over 600 of its stores. Many Tesco stores are situated less than 500 metres from a shop in Booker’s network, which has raised concerns over competition. Tesco, who has around 28% share of the overall grocery market, has enlisted law firms in an attempt to convince regulators that it should not have to sell off stores as a result of the merger.​

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