Retail & Leisure News - 19 July, 2017
Retail sales rose 1.2% in June on a LFL basis, helped by the warmer June weather, according to the BRC. Total sales were up 2%, above the six and 12-month average, while online sales rose 10.1% in June. Non-food LFL sales were up 0.9% over a three-month period, while total non-food sales rose 1.2%, the highest three-month average since December. Food LFL sales increased 3.6% over the last three months, while total food sales rose 4.7%. The rise in food sales mainly follows the rising food prices. Inflation may also be affecting non-food sales, as this and high household debt mean shoppers are less willing to spend money on goods, especially big-ticket items. June’s positive sales figures were reflected in its monthly footfall. Boosted by the sunny June weather, footfall increased 0.8% YoY, according to the BRC. Retail parks had the highest growth of 2.3%, while high street footfall rose 0.9%. However, shopping centres saw a 0.8% decline.
In other positive news, following the weakness of the pound, the number of UK visitors rose 21.1% in Q1, according to the ONS. Visitor numbers hit a record 8.3m, while visitor spend also hit the record of £4.4bn. Most significant was growth from American, Chinese, Australian and French visitors. The F&B sector is one of the biggest beneficiaries from the rising tourism, according to UKinbound and VisitBritain. Restaurants take 11% of all visitor spend, with American visitors taking the biggest share of 24% of all visitor spend in restaurants. Retailers are also seeing benefits from the jump in visitor numbers; Aesop and Maison Bonnet have both announced new London store openings this autumn. Burberry UK also benefited from tourist shoppers taking advantage of a weaker pound. LFLs at Burberry rose 4% in the quarter to the end of June, while retail revenues rose 3%.
To capture retail spend and the rising number of visitors, the retail industry continues to evolve beyond traditional retail places. Creating destinations is one way to drive traffic in shopping centres and this week, St Enoch in Glasgow has announced new plans for VUE Cinemas to anchor the East End leisure development, joined by eight restaurants and 35,000 sqft retail and leisure space. “Shopping centres have always looked to make the most of their space and generate revenue, but with store closings becoming more frequent, the space they leave behind is being filled by a new type of tenant”, comments Tracey Hatley, Director of Specialty Leasing, JLL Retail.
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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