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​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 14 November​​​, 2016​​​​​​​​​​​​​​​​​​​​​


October sales grow at fastest rate since January

October’s retail sales grew at the fastest rate since January, with uplifts across the board, showing the resilience of the UK retail market. On a LFL basis, sales rose 1.7% in October, while total ​sales were up 2.4%, against a 0.9% increase in October 2015, well above the three-month average of 1.1%, according to the BRC. The strong sales were driven by fashion sales, which picked up in October as temperatures dropped, and electronics sales, which were boosted by new product releases. International shoppers’ spending has also soared since July, and helped boost October’s figures.

​Despite the overall sales growth, ​​the months following th​e vote to leave the EU have brought challenges for UK retailers, including currency fluctuations and consumer uncertainty, which have accentuated the polarised nature of the market. SuperGroup and Primark bo​th announced strong results last week. SuperGroup benefited from sterling’s weakness, as revenues soared 31.1% across the group in the six months to October 29. Total retail sales increased 25% while LFLs were up 12.8%, and wholesale rose 43.8%. The Group opened 12 new stores over the period, all outside of the UK. Primark’s group revenues rose 5% in the year to September 17, while pre-tax profits jumped 47%, as it opened 22 stores in the year, with plans to open another 25 stores next year globally. The EU referendum could provide opportunities for Primark, according to owner ABF, assuming tariff-free trade deals with countries such as Sri Lanka, a big clothing manufacturer, are negotiated by the government.

Sainsbury’s, meanwhile, reported a 1% drop in LFLs in the 28 weeks to 24 September, and first-half profits fell 10.1% as pricing pressures continue to impact margins, and the effects of the fall in the sterling remain uncertain. Halfords reported growth in its retail division of motoring, cycling and leisure products as LFLs grew 2.4% in the 26 weeks to the end of September, while total revenue increased 6.3%. However, more expensive imports affected Halfords’ pre-tax profits, which were down 16.7%. Halfords put the cost from sterling's devaluation at around £6m in the first half.​​​

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