UK retail correspondent
James's Feed
Apr 17, 2015

Property writedown to add to Tesco’s turnaround challenge

LONDON (Reuters) – Tesco (TSCO.L: Quote, Profile, Research, Stock Buzz) will point to recent signs of recovery when Britain’s biggest retailer reports annual results on Wednesday, though an expected big writedown on the value of its stores could highlight the work still needed to mend its finances.

Analysts think asset sales, including perhaps parts of its Asian and mainland European businesses, could be on the cards, and that Tesco may also ask shareholders for cash to help reduce about 7.5 billion pounds ($11 billion) in net debt and a pension deficit that may have ballooned to more than 5 billion pounds.

Apr 8, 2015

Tesco sales rise shows tentative recovery continues

LONDON, April 8 (Reuters) – Sales at Britain’s biggest
retailer Tesco edged higher over the last three months,
industry data showed on Wednesday, adding to signs of a
tentative recovery in the supermarket’s fortunes under its new
boss.
Market share figures from researchers Kantar Worldpanel also
showed discounter Aldi overtaking upmarket chain
Waitrose to become Britain’s sixth-largest supermarket by sales.
The rise of Aldi and fellow discounter Lidl has
been a major thorn in Tesco’s side in recent years.
Since joining in September, new Tesco chief executive Dave
Lewis has been fighting back by cutting prices, increasing
product availability, cutting queues and improving stores.

Kantar Worldpanel said Tesco’s sales rose 0.3 percent in the
12 weeks to March 29.
That increase, which followed data last month showing
Tesco’s strongest sales performance in 18 months, helped the
supermarket to almost halt its market share decline. Its share
was down only two tenths of a percentage point to 28.4 percent
compared with last year.
Shares in Tesco are down 11 percent year-on-year, but are up
a third so far this year on recovery hopes. The stock was down
1.3 pence to 250 pence at 1003 GMT, valuing the business at 20.5
billion pounds ($30.6 billion).
Lewis is also cutting costs and selling assets to mend
Tesco’s finances and fight back from years of declining market
share, debt-rating downgrades and an accounting scandal.
The firm reports 2014-15 results on April 22 when it is
expected to post a third straight fall in annual profit.
Of Tesco’s major rivals, Sainsbury’s saw a sales
increase of 0.2 percent in the three-month period, its first
growth since August 2014.
However, Asda and Morrisons recorded sales declines
of 1.1 percent and 0.7 percent respectively.
Asda, the British arm of U.S. group Wal-Mart, in
particular appears to have been affected by Tesco’s improvement.
Aldi and Lidl’s sales rose 16.8 percent and 12.1 percent
respectively, taking their market shares to 5.3 percent and 3.7
percent.
Aldi’s growth has been fuelled by over half a million new
shoppers choosing to visit this year and average basket sizes
increasing by 7 percent, Kantar said, though it added that sales
growth for the discounters had slowed in recent months.
Aldi has an expansion plan which will see it double in size,
reaching 1,000 stores by 2022.
Britain’s overall grocery market grew 1.0 percent over the
period, Kantar said. Grocery inflation was down 2.0 percent,
reflecting the impact of Aldi and Lidl and the market’s
competitive response, as well as deflation in some major
categories including vegetables, milk, eggs and bread.

Apr 2, 2015

M&S returns to non-food sales growth after four-year wait

LONDON (Reuters) – British retailer Marks & Spencer (MKS.L: Quote, Profile, Research, Stock Buzz) posted its best quarterly non-food sales performance in four years, putting behind it the online distribution problems that ruined its Christmas and buying its chief executive more time to secure a recovery.

Shares in Britain’s biggest clothing retailer rose as much as 6.3 percent to a seven-year high after it said sales of general merchandise, spanning clothing, footwear and homewares, rose 0.7 percent in the past quarter at stores open more than a year.

Apr 2, 2015

Marks & Spencer posts best non-food sales outcome in four years

LONDON (Reuters) – British retailer Marks & Spencer (MKS.L: Quote, Profile, Research) has posted its best non-food sales performance for nearly four years as it starts to put its online distribution problems behind it.

The company said sales of general merchandise, spanning clothing, footwear and homewares, at stores open more than a year rose 0.7 percent in the 13 weeks to March 28, its fiscal fourth quarter.

Apr 2, 2015

M&S posts best non-food sales outcome in four years

LONDON, April 2 (Reuters) – British retailer Marks & Spencer
has posted its best non-food sales performance for
nearly four years as it starts to put its online distribution
problems behind it.

The company said sales of general merchandise, spanning
clothing, footwear and homewares, at stores open more than a
year rose 0.7 percent in the 13 weeks to March 28, its fiscal
fourth quarter.

Apr 1, 2015

ASOS says lower price strategy is working

LONDON, April 1 (Reuters) – British online fashion retailer
ASOS said on Wednesday its strategy of cutting prices
in international markets to reverse a slowdown in sales growth
was building momentum after three profit warnings last year.

Although ASOS posted a 10 percent fall in first-half profit,
it exceeded analyst forecasts and the firm said it was confident
of hitting profit expectations for its 2014/15 financial year,
sending its shares up to 9 percent higher.

Mar 31, 2015

New Kingfisher boss axes 60 B&Q stores in UK

LONDON, March 31 (Reuters) – Kingfisher, Europe’s
biggest home improvement retailer, plans to close 60 B&Q stores
in Britain over the next two years at a cost of 350 million
pounds ($517 million), saying it has too many shops for the size
of the market.

New Chief Executive Veronique Laury announced the closure of
15 percent of B&Q’s space on Tuesday as she set out her vision
for the group, which also trades as Screwfix in Britain and
Castorama and Brico Depot in France and other countries.

Mar 30, 2015

UK retailer Kingfisher gives up on buying French chain Mr Bricolage

LONDON/PARIS, March 30 (Reuters) – Kingfisher,
Europe’s largest home-improvement retailer, has ditched its
planned purchase of French DIY chain Mr Bricolage, it
said on Monday, following concerns over the number of store
closures that would have been required to clear antitrust
hurdles.

Doubts had been raised regarding the deal last week after
the majority of the Mr Bricolage board and its largest
shareholder, franchisee group the Association Nationale des
Promoteurs de Faites Le Vous-Mene (ANPF), expressed
reservations.

Mar 30, 2015

Morrisons’ recovery plan: Go back to the future

LONDON, March 30 (Reuters) – Morrisons needs to
return to its fresh food roots and shout louder about its craft
skills and locally-supplied produce if it is to compete with
discounters and give itself a fighting chance of reviving its
fortunes.

New Chief Executive David Potts started at Britain’s No.4
supermarket group on March 16, described by Morrisons’ chairman
and former Tesco colleague Andy Higginson as the best
retailer he had worked with in 25 years in the industry.

Mar 27, 2015

Marks & Spencer expected to show improving trend for non-food sales

LONDON (Reuters) – British retailer Marks & Spencer (MKS.L: Quote, Profile, Research, Stock Buzz) is expected to report an improving trend for its non-food business as it starts to put its online distribution problems behind it, despite a drop in sales for the 15th quarter in a row.

Marc Bolland, CEO since 2010, has spent billions of pounds addressing decades of under-investment at M&S, overseeing the redesign of products, stores, logistics and its website. But a new clothing team he set up in 2012 has so far failed to deliver a sustained increase in sales.

    • About James

      "Based in London I cover the UK retail and consumer sector with an emphasis on quoted companies and broader macro themes. I was previously an equities reporter at Extel, AFX and Thomson Financial."
    • Follow James