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Market Commentary

​​Weekly Retail & Leisure News - 29 June, 2015

Debenhams' sales remain positive, as foodservice adds appeal

Debenhams has reported continued positive sales growth, with Q3 LFL sales growth flat and total gross transaction volumes up 0.4% over the 15 weeks to June 13. Debenhams has invested in its multi-channel business, reflected in online Q3 sales up 16.7% against 12.7% in H1. The department store is also benefitting from adding branded food service concessions which will increase dwell time and footfall. The increased importance of food service provision in retail locations makes this a smart and proactive move to ensure Debenhams stays competitive and retains its customers.

Further positive news for the sector came from Tesco’s results with improved LFL sales to -1.3% (up from -1.7% the previous quarter) for the 13 weeks to  May 30. Despite the grocer’s continuing declining LFL sales figures, this could signal the start of a recovery for Tesco. The supermarket’s LFL volumes are up 1.4% with transaction numbers increasing by 1.3% which suggest that grocer is winning customer share. This may be due to Tesco’s change in strategy to focus on improving the customer’s shopping experience.

Elsewhere in the UK, a number of retailers have announced expansion plans. Ikea plans to role out small-format stores across the UK, to test “order and collection points”, starting in Norwich in the autumn. In addition, BrightHouse is targeting a roll out of 140 small-format stores after a trial of a ‘satellite’ shop in Scotland. Finally, Pep & Co has announced the opening of its first clothing shop in Kettering. After a two-week pause to test the IT system it will open another 49, around one a day, until the end of August in towns across the UK.

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