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Market Commentary

​Weekly Retail & Leisure News - 15 September, 2014​

​UK Retail sales up 1.3% in August, as Next reports strong sales growth

Sales of autumn collections and back-to-school clothes helped retailers to enjoy a bounceback in sales last month. According to the BRC, sales in August were up 1.3% on a year ago in LFL terms, the strongest growth since January (with the exception of April). In clothing and footwear, the more favourable conditions were augmented by some solid growth from the back to school category, which is being pushed as heavily as ever by both high street and grocery players. Overall, fashion saw the highest monthly growth in almost three years. However, steep discounting meant grocers continued to suffer from falling takings on food sales.

In other positive news, Next, the UK's largest specialist clothing retailer, saw total brand sales jump 10.7% to £1.85bn in the six months to July 26, with Retail division sales up 7.5% and Directory sales up 16.2%. In addition, Next's online reach has been boosted by its social media engagement, with its #ChangingRoomSelfie competition helping to create a 7,000 strong blogger network. This demonstrates the importance for retailers to develop truly multi-channel strategies, and to embrace social media initiatives in order to reach and influence consumers in both the physical and virtual worlds (see our Redefining Retail Places Project for further details). 

There has also been a raft of positive news stories from the F&B sector this week, highlighting the growing importance of F&B in the UK's retail landscape. Firstly, the UK's largest bakery chain, Greggs' announced LFL sales were up 5.4% in the 11 weeks to September 13. Secondly, Nottingham's Intu Victoria Centre is bringing a host of top restaurant brands to the city for the first time, as part of its £40 million refurbishment project; a new restaurant quarter, covering two floors with up to 12 units, will open in Summer 2015. And finally, JLL's Retail Team has been instructed as sole advisors to Le Pain Quotidien for its expansion outside of London. The company currently operates in more than 200 locations worldwide. 

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