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Market Commentary

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 15​​ February​, 2017

​​​​January retail sales slump

January’s UK retail sales decreased by 0.6% on a LFL basis from January 2016, when they had increased 2.6% from the preceding year, according to the latest report from the BRC. The drop was driven by slowing sales in non-food sectors, down 2.4% YoY. By contrast, the grocers and furniture and DIY retailers continued to see solid sales in January, and some retailers received a boost from Chinese New Year. The results reflect a more cautious consumer mindset following the relatively strong Christmas trading period, and also the fact that many retailers were up against strong comparable figures from last year’s January sales.

New Look has reported UK LFLs down 4.7% in the quarter to December 24, while group LFLs fell 4.6% - pre-tax profits were down 37.6% to £30.1m in the same period. The retailer, who has recently shifted focus to include more menswear, has 591 stores in the UK and 276 overseas, including 100 outlets in China (which recorded LFL growth during the period). According to New Look’s CEO, the company will continue to diversify its offer and to invest in its priority international markets. It is clear that selective international diversification and adapting to fast-changing consumer behaviour remain key to successful retailer growth and expansion.

And finally, major high street names, including the owners of Pizza Express, Greene King, Wagamama, All Bar One and Slug & Lettuce have called on chancellor Philip Hammond to rethink a planned rise in business rates, which could see some outlets hit with a 42% increase in their bill. The operators warn that the UK will face losing some of its most popular pubs and restaurants because of the business rates rise due in April. On average, restaurants would see a 23% rise in business rates, described as unfair and unworkable in a sector where margins are already under intense pressure.​

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