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Market Commentary

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

Food inflation picks up again

Food prices rose 2.3% during the 12 weeks to March 26, according to Kantar World Panel. Inflationary pressures were reinforced by the BRC’s most recent Shop Price Index report, which recorded the sharpest inflationary rise since February 2014. Food inflation accelerated to 1% in March, up from the 0.4% rise in February. The inflation follows a period of deflation in food prices, where supermarkets cut prices in order to compete with discount grocers such as Aldi and Lidl. The recent ease of discounting among the Big Four supermarkets has led to a drop in spending on promotions by 5.5%. Lidl and Aldi both reached new record highs during the past quarter and now account for 11.7% of the British grocery market.

In other news, several retailers have reported positive results in the past week. LFLs at Co-op rose 3.5% in its core grocery business in the year to December 31, while total sales rose 1%. LFLs at Mothercare rose 4.5% in the 11 weeks to March 25, while online sales jumped 13.6%. Ann Summers saw LFLs inch up 0.6% in the year to June 25. The retailer’s online channel recorded a 6% increase in the period. Finally, underlining the importance of omni-channel retailing, sales at ASOS soared 37% in the six months to February 28, while pre-tax profits rose 14% to £27.3m.

In other positive news, footfall is expected to increase 5.4% over the Easter weekend, according to Springboard. Footfall on the UK high streets is predicted to increase 8.8%. Mild weather along with the timing of the weekend boost visitor numbers. Consumers are likely to continue spending on food and leisure.

JLL’s weekly newsletter will take a break over Easter and our next newsletter will come out 24 April. We wish all our readers a happy holiday.

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