What's in this report?
This ‘newsletter-style’ report provides you with key monthly updates as to what’s happening in the UK retail and leisure industry. It keeps you abreast of the latest:
- • Retail news & stories
- • Updates by category & channel
- • Latest economic indicators
- • Key retail dates throughout the month & more…
Succinct, punchy, need-to-knows for professionals in retail, leisure and retail-related industries.
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Podcast format
You can listen to selected highlights of this report in our weekly Retail Roundup podcast. Listen to retail news and updates on the move!
Example podcast episode:
Example insights
Economic Update
Grocery inflation slows marginally
Grocery price inflation fell to 6.8% in January, down from 6.9% in December 2023, according to Kantar. This is a softer decline that the 2.2pp fall seen between November and December.
Take-home grocery sales increased in value by 2.9% in the four-week period. Items bought on offer accounted for 27% of all grocery spending in Jan compared with 32% in Dec, reflecting relatively heavier discounting over the Christmas period.
As households alter their spending behaviour in response to high living costs, Kantar found that 86 million more lunchboxes were brought to work in 2023.
Dry January also had an impact on alcohol sales, which fell by more than half compared with the previous month, with almost 6% of packs of beers sold in the month being no or low-alcohol versions, up from 4% at the end of 2023.
Veganuary further resulted in an 8% increase in sales of own label plant-based items. However, the impact of sales of health-related items was softer on the whole compared with previous years, pointing to the spread of spending on this area beyond an initial January spike.
Looking ahead to February, grocery sales will be impacted by consumers’ spending for Valentine’s Day and the extent to which this is cut back.
Mortgage approvals rise
Annual growth in unsecured lending rose by 8.5% in December from an 8.6% rise last month.
Consumers borrowed an additional £1.2bn in consumer credit on net, falling from last month’s £2.1bn.
The easing was driven by borrowing through credit cards which fell to £0.3bn in December from £1.0bn in November. Net borrowing through other forms of consumer credit edged lower to £0.9bn in December (from £1.1bn last month).
Mortgage approvals for house purchases rose to 50,459 in December, from 49,313 in November. This was the highest figure since June and ahead of the previous six-month average of 48,460.
Individuals repaid, on net, £0.8bn of mortgage debt in December compared to zero in November.
Notably, the annual growth rate for net mortgage lending was flat for the first time on record.
Food & Grocery
Electronic shelf labels - Lidl is replacing paper pricing tags with electronic shelf labels across UK stores to improve efficiency as colleagues will spend less time updating price tags manually. The retailer also claimed the move will save over 206 tonnes of carbon annually as a result of reductions of paper and packaging. staff training.
Potential strike - GMB union members at Asda stores in Brighton Marina and Brighton Hollingbury are considering whether vote for strike action over issues including poor contracts, health and safety issues and inefficient staff training.
Supporting farmers - Lidl unveiled plans to invest £70m in long-term contracts of up to three years to support British farmers amid challenging weather conditions. It forms part of the retailer's broader aim to invest £17bn into the British food industry by 2025.
Media network - The Co-op launched Co-op Media Network together with its long-term agency partner Threefold, making it the first in the UK convenience sector to launch its own retail media network. The network aims to help brands access a greater range of audiences as well as creating more relevant advertising for its shoppers.
Appointment - BP appointed former Marks and Spencer franchise director David Phillpot to the newly created role of convenience trading director for Europe. Phillpot is set to play a key role in overseeing the growth of the company's European network of over 3,000 convenience stores.
Clothing & Footwear
Financial Updates - Superdry saw sales fall 23.5% to £219.8m in the 26 weeks to 31 October 2023. Adjusted pre-tax loss increased to £25.3m from £13.6m in the same period last year, with statutory pre-tax profit coming in at £3.3m. The retailer attributed to the performance in particular to poor wholesale performance, challenging market conditions and unseasonal weather, issuing a profit warning as a result.
Supply issues - Matalan acknowledged facing stock issues arising from instability in the Red Sea. The retailer did not reveal which product categories are being affected but stated that it has plans to reduce the impact on consumers.
Potential CVA - Ted Baker owner Authentic Brands Group is reportedly set to appoint advisers on a potential restructuring of the company with the aim of reducing spending on rent. Cost-saving measures such as a potential CVA are thought to be under consideration, which could result in rent reductions and store closures.
Sector expansion - Marks & Spencer started selling Puma and Reebok products on its sportswear platform The Sports Edit, which now offers five of the top 10 global sportswear brands. Over 140 products from Puma and Reebok will be introduced over the next two months.
Potential takeover - Superdry chief executive Julian Dunkerton confirmed that the company will be looking into a possible buyout, seeing its share price surge on 2 February as a result.
