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​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 07 November​​​, 2016​​​​​​​​​​​​​​​​​​​​​

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High street sales receive timely boost

BDO’s high street sales tracker recorded a 0.7% rise in October, its first positive performance since February this year. October’s sales were largely driven by an 11.6% increase in homewares sales and a 2.3% rise in lifestyle goods, as consumers spent more freely, boosted by low unemployment and encouraging post-referendum figures. According to a separate survey by Barclays Bank, 64% of Britons still prefer to shop in physical stores, and many want to see protection of British retailers to be prioritised as part of Brexit negotiations. The survey also revealed that although most enjoy physically seeing a product before buying, customers are now looking for more experience based shopping and in-store technology, such as virtual reality.

Despite concerns that prices of food and other goods would increase following the EU referendum, prices on the high street are still falling, according to the BRC. Shop prices fell 1.7% in October YoY and barely changed from the 1.8% drop in September. Food prices fell 1.2% YoY in October, driven by the ongoing price battle between the biggest grocers to defend their market share, while fashion sales fell 2.1% YoY, pushed down by the unseasonable weather. However, inflation is expected to pick up in 2017 with the sharp fall in the pound pushing up the prices of imported goods. “It is inevitable that imported inflation will begin to make its mark and we would expect to start to see this effect coming through in the first quarter of 2017” said Helen Dickinson, BRC.

Affected by the unseasonable weather, fashion retailers have reported a difficult third quarter with forced discounting to attract customers. Next reported a total sales rise of 0.4% for the year to date, while full-price sales fell 1.5% during those nine months. Next’s full-price sales fell 3.5% in the third quarter to October 31, however October’s colder weather improved performance and sales grew 1.3% in the month. As fashion sales have declined over recent years, Marks & Spencer has announced a strategic shift to focus on expanding its food business. The retailer could close up to 30 stores, and instead plans to open a further 200 Simply Food outlets by 2019.

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