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Market Commentary

​​Weekly Retail & Leisure News - 03 November, 2014

Consumers approach Christmas positively, as luxury retail shows continued strength

Consumers are approaching Christmas in a more positive mood than at any time in the past decade, according to two surveys released last week, both of which showed that households are much more confident than a year ago. In addition, high street shoppers are continuing to power the UK economy, with retail sales growth at its fastest since February 2011 in the three months to October. Around 48% of retailers reported sales volumes increased in October, while 17% said they fell, giving a balance of +31, the same as the previous month and better than the +25 predicted.

Luxury retail continues to benefit from strong growth, with Harrods reporting operating profit up 13% to £122.9m in its year to February 1 as sales rose 10.8% to £794m. In addition, Selfridges registered the largest profit in its 105-year history, on the back of a continued push towards the luxury market. The department store reported operating profits of £150m for the year to December 2013, up 12.3%. The increase in profit came on the back of a 10.4% increase in sales, to £1.2bn. 

And finally, the Science Museum is due to open its first standalone pop-up store at Bluewater to capitalise on the busy Christmas trading period. The 1,300 sq ft store will be located next to the Reebok store and will be open from the beginning of November until December 31. Visitors to the store will be invited to take part in immersive experiences including demonstrations of experiments, robots and gadgets. This is a great example of shopping centre operators diversifying  to offer an experiential  mix of retail and services to satisfy the needs of the modern 'visitor' (see our Redefining Retail Places Project for further details on the importance of a diverse retail and leisure offer). 

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