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Market Commentary

​Weekly Retail & Leisure News - 04 August, 2014

​Next and John Lewis unveil positive trading statements after embracing the digital world

​Digital technologies and new forms of communication have been the most profound development that we have seen in the retail world in terms of reshaping how consumers behave and interact with retailers and the physical space. In our Redefining Retail Places Project, we have explored how consumers’ expectations of physical environment are now fundamentally different from even just a few years ago. The distinction between virtual and physical space in the retail world has become increasingly blurred and consumers are no longer choosing between the two as straightforward ‘either/or’ options. Both Next and John Lewis have led the UK market in connecting their online and physical environments in new configurations that deliver a seamless and immersive ‘omni-channel’ proposition. It is thus no coincidence that both retailers have announced positive trading figures this week.

Next announced that total sales rose 10.7% in the 26 weeks to July 26, after a 10.8% rise in the first quarter. The retailer also said that store sales rose 7.5%, while sales in Next Directory, which incorporates their online business, were up 16.2%. For John Lewis, a strong performance in furniture helped boost sales 8.5% to £69.4m last week, taking its growth for its first half to 9.4%. The retailer also announced this week that the country’s most conveniently located department store will open in September 2015. The new 250,000 sq ft regional flagship store will sit directly above Birmingham New Street station, the busiest railway station outside of London.

Another retailer to embrace the digital revolution and report positive sales is Argos. This week, the retailer has opened the first of its new small-format digital concept stores in Liverpool One and Cheapside, London. These 3,000 sq ft stores are significantly smaller than a typical 15,000 sq ft Argos shop and have been designed in the retailer’s new digital format. The stores will be supplied by nearby larger stores as part of Argos’ new ‘hub and spoke’ strategy. JLL's Central London team acted for the Landlord on Cheapside.

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