Retail & Leisure News - 09 August, 2017
Next has reported improved trading in the second quarter to the end of July, with Directory sales up 11.4% and overall full-price sales up 0.7%. The retailer has narrowed its full-year sales guidance as a result, after Q2 sales were boosted by the warm June weather and better product ranges. Despite the cautious optimism, the overall picture for the year to date is less rosy, with retail sales down 7.7% and total sales down 1.2% in the six months to July 29, and on a weak comparative. Declining store sales, rising import costs and strong competition are ongoing challenges for Next to overcome in the second half of the year.
Greggs’ momentum continues with LFL growth of 3.4%, and total sales growth of 7.3% to £453m, in the six months to July 1 - proof that retailers adapting to changing consumer demand and spending patterns are still prospering. Much of the sales uplift has been driven by Greggs’ move into ‘food on the go’ categories, such as breakfast, coffee, and hot takeaway items. Growth has also been driven by its Balanced Choice Range, including new salads and drinks. Greggs opened 61 new stores in the period, including its first drive-through store, and aims to open around 100 net stores by the end of the year.
Finally, consumer spending dropped by 0.8% YoY in July, according to Visa. This is the third consecutive monthly fall and the longest decline in four years. However, the leisure market remains resilient; hotels, restaurants and bars benefitted from a 6% rise, while spending on recreation and culture rose 1.3%. The resilient leisure market is reflected in the number of F&B operators currently expanding; in the past week, Wasabi has announced a partnership with M&S to open counters within its Foodhalls, Yo! Sushi reported it will open a new flagship restaurant at London’s Tottenham Court Road, and PF Chang’s is among the most recent international restaurant chains to expand in the UK, with its PF Chang’s Asian Table just opened in London.
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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