Weekly Retail & Leisure News - 07 November, 2016
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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Director, Head of Retail Research (UK & EMEA)
+44 (0)20 3147 1155
Director, Head of UK Retail & Leisure
+44 (0)20 7318 7838
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