Weekly Retail & Leisure News - 18 April, 2016
Tesco has returned to profit after it registered the biggest loss in British corporate history last year. The grocer posted a £162m pre-tax profit for the year ending February 27, up from the £6.4bn loss it posted in 2015. Tesco also reported its first quarter of UK sales growth in three years, with LFLs rising 0.9% in its fourth quarter. The supermarket chain has successfully attracted customers by cutting prices to compete with the discounters. In the past year, Aldi and Lidl have built more than 100 sites while Tesco has constructed just four, as a result, competitive pricing at the UK's leading grocer will need to be continued to sustain its sales momentum.
In other positive news for the sector, House of Fraser announced its first profit in 10 years last week. The department store achieved pre-tax profits of £1.3m in the year to January 30, compared to a £2.9m loss a year before, as sales rose 4.2% to £1.3bn. Online sales rose nearly 27% after the firm improved its delivery services and website, e-commerce now accounts for nearly a fifth of total sales. Debenhams also announced that its profits rose last week. The chain's pre-tax profits increased 5.5% to £93.8m in the half year to February 27, as its total sales advanced 1.5%. Debenhams has successfully improved its full price sales mix, reduced stock levels and continued to invest in its online and international businesses in the last couple of years.
The importance of online and mobile retailing was also emphasised by Asos's positive results. The e-tailer posted a pre-tax profit of £21.2m for the six months to February 29, up from £18m the previous year. Its retail sales rose 21% to £648.6m in the same period, with half of all orders in February placed via mobile platforms. Further evidence of this trend was underpinned by LMVH, JD Sports, Halfords, Harveys, ScS and Mothercare all noting strong online performance in their trading results last week.
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Director, Head of Retail Research (UK & EMEA)
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Director, Head of UK Retail & Leisure
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