Weekly Retail & Leisure News - 14 September, 2015
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
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.
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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
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