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Market Commentary

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 14​​​​​ September, 2015


Mixed results from busy week on the High Street

​​​​​​​In a busy week for trading updates, a number of the UK’s largest retailers have released encouraging results. Dixons Carphone performed strongly with LFLs in the UK and ROI rising 10% in the 13 weeks to August 1. The group continues to reap the benefits of its long term shift to a customer-focused service-led proposition, competing effectively against pureplays. Next’s total sales for the year to September 10 rose 2.7% and John Lewis department store’s LFLs grew 3% for its H1. All three continue to invest heavily in their offer across both physical and digital channels.

In further positive news, Dunelm’s LFLs rose 5.8% in the year to June 27. The homewares retailer has improved its existing estate and launched a new website. Homebase’s LFLs increased 5.9% in the 14 weeks to August 29 as it continues to optimise its store portfolio. In the same period, LFLs at Argos declined 2.8% as the retailer moves ahead with its ongoing transformation strategy.

In the grocery sector, both Waitrose (-1.3%) and Morrisons (-2.7%) suffered declines in their H1 LFLs, highlighting the challenges that remain in the market. Online sales have slowed for Waitrose, with sales down 13%, however click & collect increased nearly 50%. In addition, Morrisons has agreed to sell its convenience stores which will enable future investment to be focused on its core supermarkets. A theme to emerge from the raft of trading results was how retailers were planning on dealing with the financial impact of the upcoming living wage. However retailers mitigate against the living wage (and various approaches were mooted), it is likely to be a challenge to prevent increased wage bills hitting profit margins.

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​JLL UK Retail and Leisure team are attending BCSC 2015, please visit us on Stand 78 throughout the exhibition.

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