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Market Commentary

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 28​​​​​​​​​​​​​​​​ September, 2015

House of Fraser and Aldi sales rise

​​​House of Fraser has reported a sharp rise in sales and profits after being boosted by investment from its new Chinese owners. LFLs rose by 6.5% year-on-year in the half-year to August 1, including a 2% rise in LFLs in physical stores and a 31% rise in online sales, which account for 17.5% of the business. The department store chain now has 60 stores and is now controlled by Chinese conglomerate, Sanpower, who are reportedly committed to spending £25m in store revamps over the next two years, after already heavily investing in their online capabilities.

Meanwhile, discount grocer, Aldi, has unveiled their first UK web operation this week as they announced record sales of £6.9bn for the year to December. The retailer has also opened a number of new stores recently, which has helped drive sales growth of more than 30%. Aldi’s operating profit fell in the period by £11m to £260m, as the company reduced prices and hired more staff.

Retailers, such as House of Fraser and Aldi, who adopt a multi-channel retail strategy, integrating the internet, mobile and in-store experiences, will thrive in today’s retail environment. JLL has explored the impact of e-commerce on the UK’s retail market, and the recent evidence of the benefits of seamless multi-channel retailing. As Tim Vallance, Head of UK Retail and Leisure comments in this podcast at BCSC, we are therefore optimistic that the right physical space is still fundamental to retail success.

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