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Market Commentary

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 19​​​​​​​​​​​​​​​​​ October, 2015

UK LFL retail sales up 2.6% in September

​​​​UK retail LFL sales increased 2.6% in September from the same month in the previous year, when they decreased 2.1%, according to the British Retail Consortium (BRC). On a total basis, sales were up 3.9%, against a 0.8% fall in September 2014, the fastest growth since January 2014, excluding Easter distortions. Also in the news last week, the Consumer Prices Index, published by the Office for National Statistics (ONS), fell to -0.1% in September. Andrew Burrell, Head of Forecasting at JLL said: “The extent of deflation is modest and largely a reflection of recent commodity price weakness. Intensifying wage growth will put upward pressure on the CPI rate, taking it back towards the official target over the next 12 months.”

The positive UK retail sales momentum is reflected in healthy trading figures released by Office and Mountain Warehouse last week. Office's LFL sales rose 1.2% for the 12 months to January 25, while revenues increased 5.5% to £270.2m and pre-tax profits were £43.2m in the same period. Mountain Warehouse boosted sales by 24.7% to a record £59.3m, while pre-tax profits rose by 31% to £4.3m in the six months to August 30, as it announced expansion into China through an online initiative.

In other news, figures from the BRC show that total retail footfall in the UK in September was 0.2% lower than a year ago, an improvement on the 1.6% fall in August, with UK high streets benefiting from the most positive result for seven months, despite a decline in footfall of 1.4%. This positive development comes as the pace of retail store closures across the UK has fallen to the lowest level for five years, according to PwC. 2,534 shops have closed in the first half of the year, a rate of 14 a day, compared to a rate of 15 a day in same period last year.

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