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Market Commentary

​​​​Weekly Retail & Leisure News - 15 June, 2015

Retail sales flat as footfall declines

​May's UK retail sales were flat on a LFL basis compared to May 2014, according to data from the BRC. On a total basis, sales were up 1.1%, against a 2.0% rise in May 2014. In the three months to end of May, food sales grew by 0.5%, while non-food sales continued their strong performance growing 2.8% over the same period.  May's footfall figures, however, were 1% lower than a year ago, indicative of a trend for falling footfall across many UK retail locations; as consumers become more 'targeted' in their shopping trips, supported by online research.

Sainsbury's has been able to capitalise on the market's recent food sales growth, even though sales have dropped for the sixth straight quarter. The supermarket reported that LFLs excluding fuel fell 2.1% in the 12 weeks to 6 June, but in a "highly competitive" market were better than expectations. The firm said volume and transactions continued to grow, but recent results have been hit by a number of one-off costs, including a write-down in the value of some of its stores.

Home Retail Group also remains cautious about its trading prospects despite an improvement in LFLs at both of its brands this week.  The group said it expects trading to remain "challenging" during the first half at Argos, after LFLs dropped 3.9% during the 13 weeks to May 30. This was, however, an improvement on the 5% decline reported during Q4 of last year. It was a more positive story during Q1 for Homebase, as LFLs jumped 5.4% during the period. Bon Marché, Heal's, John Lewis, Majestic Wines and Ted Baker have also all announced positive trading figures in the past week.

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