Weekly Retail & Leisure News - 10 October, 2016
Household spending bounced back last month, as UK consumers spent heavily on leisure activities, according to Visa. UK consumer spending was up 2.4% YoY in September, having been broadly flat in August, the lowest growth in nearly three years. The fastest spending growth was in the recreation and culture industry followed by hotels, restaurants and bars. By contrast, spending on clothes and shoes was down on a year ago. Taking the latest three months together, Visa commented that spending momentum remained subdued as households continued to digest the result of June’s referendum on EU membership.
The BRC has warned consumers that shop prices may rise substantially if the Government fails to secure agreeable post-Brexit trade deals. If the UK was to revert to World Trade Organization (WTO) rules, it would mean tariffs on clothes could rise up to 16% and meat up to 27%. The BRC also pointed out that as well as higher prices, some products, such as New Zealand lamb, are subject to EU import quotas, so could become cheaper outside the EU.
In retailer news, Tesco and Greggs both reported rising sales this week after successfully executing new strategies. Tesco’s LFLs grew 1% in the half-year to August 27. Its UK sales rose 0.6% and have now risen for three consecutive quarters. However, profit before tax fell 28% to £71m for the half year, mainly due to one-off costs, but the group said it was on track to make £1.2bn in full-year annual operating profit. Greggs’ LFLs rose 3.4% in the 13 weeks to October 1. So far this year, Greggs has carried out 145 refurbishments, opened 103 stores and closed 58, as it continues its five year strategy to target the £6bn food-to-go market.
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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