Retail Economics

🎄 Dunelm’s Christmas Trading Update: Strong Start to FY25 🎉 Dunelm achieved strong results in the first half of FY25, building momentum for future growth. Key highlights below 👇 📈 Sales Performance: 🔷 Group revenue rose by 2.4% to £894m in H1, with Q2 sales up 1.6%, showing resilience in a challenging market. 🔷 Digital participation climbed to 40%, fuelled by strong growth in Click and Collect sales. 🛋️ Category Highlights: 🔷 Furniture categories excelled, from sofas to dining chairs and coffee tables. 🔷 Customers responded well to well-priced products paired with attractive delivery options. 💷 Gross Margin: 🔷 Margins improved by 10 basis points, now expected to land in the upper half of the guided range (51%-52%). 🔷 Promotional activity remained disciplined, balancing value across "good, better, best" tiers. 🏬 Strategic Developments: 🔷 Acquired Homefocus Group Limited in Ireland, adding 13 small stores and opening up a new geography. 🔷 Opened the first inner London store at Westfield London, ahead of the Christmas trading period. 🔷 Five new UK superstores are on track for H2 FY25. 🔮 Outlook: 🔷 Full-year profit before tax is forecast at £213m (range: £207m-£217m), in line with market expectations. 🔷 Dunelm is targeting a 10% market share, leveraging current conditions to enhance its offering. What’s your view on these results? Share your thoughts below 👇

 🎄Strong Peak Trading for Currys 🎉 Currys delivered impressive results this Christmas, with profits on track to exceed market expectations. Key highlights below 👇 📈 UK & Ireland Highlights: 🔷 Peak like-for-like revenue rose by 2%, with strong sales in mobile, gaming, and premium computing. TV sales showed weaker trends. 🔷 Order & collect sales increased by 13%, and online-in-store sales grew by 24%. 🔷 "Sold with" adoption climbed to 41.1% (+7.8 percentage points), and credit adoption grew to 23.0% (+2.5 percentage points). 🔷 iD Mobile Subscribers accelerated 30% year-on-year to 2.1m, with an additional 0.5m subscribers added over 12 months. 🌍 Nordics Highlights: 🔷 Peak like-for-like revenue grew by 1%, balancing sales growth with historically high gross margins. 🔷 Gains in domestic appliances and computing; TVs and mobile saw weaker trends. 🔷 Order & collect sales surged 29% year-on-year. Cost Savings: Delivered efficiencies to offset inflation impacts. 💷 Financial Outlook: 🔷 Adjusted profit before tax is forecast at £145-155m, a 23-31% year-on-year increase, exceeding market expectations. 🔷 The Board plans a final dividend of 1.3p, with regular dividends set to follow from 2025/26. 🚀 Looking Ahead: 🔷 EBIT growth forecast for both UK & Ireland and Nordics regions. 🔷 Capital expenditure to remain under £80m, with other expenses stable. 🔷 Longer-term targets include an adjusted EBIT margin of 3.0%+ and annual capex staying below £100m.

What happened to retail stocks last week? 📈 Leading Stocks: QUIZ Clothing (6.9%) shares rose after shareholders approved delisting from the AIM market amid financial challenges. Over 98% backed the move, with shares set to cease trading on 23 January 2025. JD Sports Fashion (2.6%) stock gained due to positive investor sentiment ahead of its trading update this week. THG (2.1%) announced its shares would transfer from the equity shares (transition) category to the equity shares (commercial companies) category on the Official List, effective 6 January 2025. The move is aimed at enhancing market visibility and investor appeal. 📉 Trailing stocks: B&M Retail (-12.2%) shares dropped after reporting a 2.8% decline in like-for-like revenue growth for Q3 (13 weeks to 28 December). Full-year guidance was narrowed, with the top-end lowered to £650 million from £660 million. Marks and Spencer's (-14.2%) share price fell despite strong Christmas sales, as concerns over rising costs and increased taxes weighed on investor sentiment. The company flagged uncertainties tied to inflation and taxation, likely to affect profitability. Greggs' (-25.5%) stock tumbled after reporting slower sales growth, driven by weak consumer confidence ahead of Christmas. Analysts downgraded the stock, citing anticipated cost increases from higher national insurance and recent policy changes. Sosandar's (-26.5%) share price decline reflected investor caution ahead of its Christmas trading update, with concerns over the company’s ability to navigate a challenging retail environment 🔍 Sector insights: Overall, retail stocks* fell by 0.9% last week, underperforming the FTSE All-Share Index, which edged up 0.2%. *Defined by a weighted basket of 40 food and non-food retailers.

🎄 Ocado Retail’s Record-Breaking Performance! 🎉 Ocado closed the year on a high with a record-breaking Christmas! Here are the key highlights from their standout performance: 🎅 Christmas Achievements: 🔷 Record Christmas sales, with highest ever level of sales over the peak period. This was boosted by a diverse festive range featuring M&S favourites, challenger brands, and standout items like party food, artisanal cheeses, and low/no-alcohol drinks. 🔷 Customer Fulfilment Centres delivered 15% higher units per hour, with the Luton centre reaching 269 UPH. 🔷 'Perfect Orders' (on time and in full, with no substitutions) improved by 7 percentage points, with 99% of items arriving as promised and freshness extended by half a day. 📈 Q4 Highlights: 🔷 Retail revenue grew by 17.5% to £715.8m, powered by volume growth and higher customer activity. 🔷 Active customers expanded by 12.1% to 1.1m, with increased shopping frequency and stable basket sizes. 🔷 Average weekly orders grew 16.9% to 476k, as investments in price and value paid off. 🛒 FY24 Full-Year Results: 🔷 Retail revenue rose by 13.9% to £2,685.8m. 🔷 Average weekly orders increased by 12.5%, supported by a growing active customer base. 🔷 Basket value rose modestly by 1.0% to £122.09, with price growth well below grocery inflation at 0.6%. 🔷EBITDA growth was driven by efficiency and cost management improvements. 🔮 Looking Ahead (FY25): 🔷 Ocado is targeting market-leading sales growth and a high mid-single-digit EBITDA margin over the mid-term.

Head over to your favourite podcast platform or click the link below to listen to this week's episode of the Retail Roundup Podcast! 🎙️ We cover key stories on Next, Marks and Spencer, Tesco and more! Join the conversation and discover what’s shaping the retail landscape. With fresh episodes every Monday at 6 am, the Retail Roundup Podcast is your go-to source for staying informed on the latest happenings in the retail world. Whether you're a seasoned professional or new to the industry, our podcast delivers essential insights and the most current retail news to keep you ahead of the curve. 🔗 Tune in now: https://lnkd.in/e8Urgs3g #RetailRoundup #RetailPodcast #IndustryInsights #StayInformed #MondayMotivation #RetailInsight #Podcast #BusinessPodcast #InsightOnTheGo #RetailEconomics #RetailUpdates

📻 Richard Lim, our CEO, was on BBC Radio 4’s Today Programme earlier this week discussing Next’s Christmas trading update. In the 9 weeks to 28 December, full-price sales were up +6.0% versus last year. This beat expectations, adding £27m to full price sales, with full year guidance for group PBT rising to £1.01bn, up +10.0% versus last year.   👉 Next’s latest results highlight strong momentum, with online sales continuing to grow at the expense of store sales, thanks to a best-in-class omnichannel strategy.   👉 International sales surged by 31.4%, demonstrating Next's ability to scale strategically beyond the UK, even in a challenging global retail environment.   👉 However, cost pressures loom. Recent budget changes are set to add £67m in wage costs this year, driven by wage inflation, a higher national living wage, and changes to employer national insurance. Next aims to offset some of this through operational efficiencies and a modest 1% price rise on like-for-like garments.   Despite these headwinds, Next remains upbeat, stating: "We believe that the group can deliver sales growth in the year ahead, and we can grow profits in line with sales."   👉 The retail landscape, however, is growing more polarised. while Next’s scale and resilience give it a competitive edge, many retailers face tougher challenges. New Look’s announcement of accelerated store closures highlights the mounting strain across the sector.   With UK growth slowing and rising costs testing business resilience, the gap between those who can adapt and those who cannot will likely widen further.   https://lnkd.in/efJZFGxm

What’s been happening in retail this week? ·      Tesco reported its “biggest ever Christmas”, with group sales rising 3.8% over the six week festive period to 4 January. For the full 19 weeks to 4 January, sales increased by 3.1%. Tesco Finest sales surged 15.5%, while ecommerce grew 10.8%, boosted by 1.2 million Whoosh orders. Tesco continues to expect to deliver an adjusted operating profits of £2.9bn in 2024/25. ·      Marks and Spencer reported a 5.6% rise in group sales to £4bn in the 13 weeks to 28 December. Food sales grew 8.7% (8.9% like-for-like) to £2.5bn, driven by 500 new lines and investment in quality and value. Core categories, including meat and bakery, saw double-digit growth. Clothing sales rose 1% to £1.3bn, with like-for-like sales up 1.9%, while online sales increased 11.7%, accounting for 34% of total sales. ·      Next reported strong Christmas trading, raising its full-year profit guidance to £1.01bn but warned of a 1% clothing price increase and cost-savings to offset rising wage costs in 2025. Full-price sales rose 6% in the nine weeks to 28 December, driven by online as store sales declined. Adjusted for timing of its end-of-season sale, underlying sales grew 5.7%. ·      Greggs reported total sales rose 11.3% YoY to £2.0bn in the year to 28 December, with Christmas sales driven by seasonal bakes. The retailer opened a record 226 new shops, with 145 net openings, bringing its total to 2,618. It plans to open 140 to 150 net new shops in 2025. ·      Topps Tiles chief executive Rob Parker will retire after 18 years with the company. The retailer reported a 4.6% year-on-year increase in group sales for the 13 weeks to 28 December 2024, with like-for-like sales up 3.5%. ·      Evri reported “record parcel volumes” over the festive period, including its “best-ever week” following Black Friday. Total parcel volumes grew 12% to reach 173 million in the nine weeks to 28 December, with sustained demand as consumers relied on last-minute deliveries. ·      Ben Sherman parent Marquee Brands acquired Laura Ashley from Gordon Brothers. The acquisition boosts Marquee Brands’ portfolio retail value to over $4bn (£3.2bn). The deal retains Laura Ashley’s UK-based team and supports Marquee’s global expansion, including the launch of its first European headquarters in London. ·      The Perfume Shop partnered with AS Watson’s OptimO retail media ecosystem to launch a new retail media proposition. Using OptimO, The Perfume Shop will offer highly targeted ads both in-store and online. ·      SHEIN faced accusations of “wilful ignorance” from MPs over its supply chain transparency. At Tuesday's Business and Trade Committee, EMEA general counsel Yinan Zhu admitted she was unqualified to answer questions on the supply chain, including cotton sourcing from China and labour practices, and could not respond to several enquiries.   This is just a selection of news this week. Sign up below for more insight ⬇️ https//lnkd.in/d-z25aM

📊 What happened to retail stocks in 2024? The retail sector experienced a rollercoaster year, with digital innovation driving success for some 📈 while shifting consumer sentiment created challenges for others 📉. Here’s how key players performed: 📈 Top Performers 🔷 N Brown Group (+154%) experienced a pivotal year, with its share price soaring after the announcement of a £191 million buyout by the Alliance family in October. 🔷 Currys plc (+88%) demonstrated resilience, with supply chain improvements and strong electrical sales driving profitability. Cost-cutting initiatives and market confidence in its recovery made it a standout performer. 🔷 Zalando (+51%) strengthened customer loyalty through AI-driven personalisation and an enhanced logistics network, driving significant share price growth. 🔷 Marks and Spencer (+38%) thrived, with revitalised clothing and home divisions and strong food sales. Improved operations and a sharpened online presence secured its growth. 🔷 Moonpig's (+35%) focus on personalised gifting hit the mark with consumers. Seasonal campaigns and high customer retention supported its share price rise. 📉 Trailing Stocks 🔷 QUIZ Clothing (-88%) faced tough times, with financial instability and poor trading leading to its AIM delisting. The company plans to re-register as a private-limited entity to navigate market challenges. 🔷 Shoezone Retail Limited (-66%) was impacted by rising costs and declining footfall, with operational efficiencies unable to offset the pressures. 🔷 Ocado Group (-60%) battled intensifying competition in online grocery, coupled with cost challenges. Despite expanding its technology partnerships, investors remain sceptical about its growth prospects. 🔷 THG (-47%) struggled to reassure investors about profitability. Spinning off its Ingenuity platform offered some hope, but market doubts lingered. 🔷 JD Sports Fashion (-42%) underperformed, with UK sales lagging due to cost-of-living pressures affecting discretionary spending. While international growth partially offset domestic challenges, it wasn’t enough to buoy its stock. 🔍 Other notable performances 🔷 Tesco (+27%) maintained dominance, with its Clubcard programme driving loyalty and market share growth to its highest level in eight years. 🔷 Next (+17%) achieved a significant milestone, expecting to surpass £1 billion in annual profit for the first time. 🔷 Burberry (-31%) issued a profit warning in July and announced a leadership change, reflecting the pressures of slowing Chinese consumer spending. 🔷 Watches of Switzerland Group PLC (-21%) was impacted by reduced Chinese tourism and luxury demand. However, its growing U.S. presence, now accounting for 45% of sales, offers a promising growth trajectory. 2024 highlighted the importance of agility, innovation, and strategic foresight in retail. Which trends do you think will shape the industry in 2025? Share your thoughts below!

🚀 M&S Delivers a Festive Feast🎄 Marks & Spencer’s Christmas trading update has landed, showcasing a strong finish to a transformational year. Key insights below: 🍗Food Sales Sparkle 🔷 Food sales surged 8.7%, with like-for-like sales up 8.9%. 🔷 Volume growth of 6.6% crowned M&S the top-performing store-based grocery retailer in both volume and value. 🔷 Festive innovation paid off: 500 new lines launched, with Christmas product sales climbing 14%. Premium ranges like Gastropub and value-focused lines like Remarksable both saw double-digit growth. 👗 Clothing, Home & Beauty 🔷 Sales increased 1.0%, with like-for-like sales up 1.9%, outperforming the market. 🔷 Underlying sales grew 2.6% adjusted for the impact of the exit of the bulky furniture category.  🔷 Online sales soared by 11.7%, now representing 34% of total sales, up from 31% last year. 🔷 Denim, knitwear, and partywear led growth, while opportunities remain in Home and Beauty. 🌍 International Challenges 🔷 Sales fell 2.8%, impacted by difficult trading conditions in India and franchise shipment timing. M&S is resetting its international strategy, with medium-term growth potential still in focus. ✨ Operational Wins & Challenges 🔷 Investments in supply chain improvements boosted product availability, despite slightly higher markdowns due to stock flow issues. 🔷 New store formats and optimised ranges exceeded expectations, enhancing the customer experience. 📅 What’s Next for M&S? 🔷 Economic uncertainties loom, but M&S remains focused on quality, value, and innovation to keep momentum into 2025. Plans to modernise supply chains and accelerate transformation are central to its growth ambitions. 💡 What do you think of M&S’s performance? Let us know in the comments!

✅ FREE LIVE WEBINAR! - Join us for an exclusive webinar about the cost of serial online returners. Richard Lim (CEO, Retail Economics) and Al Gerrie (CEO Founder, Zigzag) will dive into the findings of the Annual Returns Benchmark Report. 📅 Wednesday, 12th February 2025 ⏰ 1 pm (GMT) 30 minutes plus Q&A 📍 Format: Live Webinar SIGN UP FREE NOW>>>https://lnkd.in/eFHnxJAq Learn about: 👉 The evolution of Returns:  Discover how the rise of ecommerce and generational shifts are reshaping return behaviours. 👉 Quantifying the challenge:  Understand the financial impact of Serial, Slow, Efficient and Occasional Returners and gain the insights to manage each cohort 👉 Future-focused strategies:  Gain actionable insights into tailoring returns policies, adopting technology, and embedding sustainability See you there! SIGN UP FREE NOW>>>https://lnkd.in/eFHnxJAq