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Market Commentary

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 16​​​​​​​​​​​​​​​​​ November, 2015

October retail sales decrease marginally

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​​UK retail sales decreased marginally by -0.2% on a LFL basis in October, according to the BRC, with total sales up by 0.9%. The drop in LFLs marks a change in fortunes after a sharp 2.6% rise in sales in September, although those figures were distorted by the timing of the end of summer bank holiday. The negative sales in October are likely to be driven partially by the rise of Black Friday, as shoppers postpone purchases in anticipation of the discounts available. The event, which has changed the way the UK shops over the festive period, falls on November 27 this year and is likely to give the sector a sales boost next week.

However, one national UK retailer, Asda, has already announced that it has decided not to take part in Black Friday this year, commenting that it would cut prices by a total of £26m over several weeks in the run-up to Christmas. The grocer also announced this week that it was launching a new parcel delivery service in store, that will enable customers to collect or return orders made at third party online retailers. Misguided has been named as the first retailer to join the service.

Meanwhile, trading continues to be mixed for UK grocers, with Sainsbury’s announcing that total group sales were down -2.0% and LFL sales declined -1.6% in the 28 weeks to September 26. Although an improvement on previous results with online grocery sales increasing 7% in the same period, this statement highlights the continued pressures that the Big Four supermarkets are facing in a deflationary grocery market, as discounters such as Lidl continue to announce expansion plans.

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