Retail sales and results

Sales

Although Omicron continued to impact the UK economy during January, typically one of the worst trading months for retail, sales values were almost 12% higher than they were in January 2021. However, some of this increase was driven by the 5.3% rate of inflation recorded during the month. Barclaycard reported that consumer card-spend grew by 13.7% in February, compared to February 2020. Clothing and footwear spend increased by 15% and was likely driven with the lifting of Covid restrictions in England, and a return to the office for many workers. There was also positive news in the beleaguered department store category where spend saw a return to growth to over 2% compared to a 6.1% decline in January.

RETAIL SALES

Source: ONS, Retail Economics

FOOTFALL CHANGE VS 2019

Source: Springboard

Total spend in the grocery sector, compared to the same period in 2020, increased by 12.9 per cent, but this was the lowest uplift since February. The latest grocery market share data from Kantar, in the 12 weeks to 20th February 2022, showed a small decline in overall market share from the big players (Tesco, Sainsburys, Asda, Morrisons and Waitrose) compared to January 2022, while there was a slight rise in share from the discounters, Aldi & Lidl. Discounter market share could continue to rise in the coming months as shoppers continue to struggle with rising household costs so may switch to these operators to save money .

KANTAR GROCERY MARKET SHARES

Source: Kantar

Results

John Lewis announced its annual results, achieving its highest sales in its history totalling £4.9bn This was up 8% like-for-like on 2020 and up 10% like-for-like since 2019. It has however, warned of ‘continued uncertainty from global events, affecting the economic environment’.

Greggs announced 2021 sales increased by 5.3%, compared to 2019 levels, to £1.23 billion. This is also significantly higher than the £811 million achieved in 2020 when many branches were closed for extended periods due to restrictions. It warned that it does not expect ‘material profit progression’ during 2022 due to increasing costs.

Ocado announced its first quarter results (to 27th February 2022) with revenues of over £564 million, a 5.7% decrease from the same period last year. The average basket size also decreased by 15%, to £124, compared to 2021 (although the UK was in lockdown during the same period last year). It did see order numbers rise by 11.6% for the period but has adjusted its 2022 full year revenue-growth forecast from ‘mid-teens’ to 10% due to rising costs.

This report has been prepared by Avison Young for general information purposes only. Whilst Avison Young endeavours to ensure that the information in this report is correct it does not warrant completeness or accuracy. You should not rely on it without seeking professional advice. Avison Young assumes no responsibility for errors or omissions in this publication or other documents which are referenced by or linked to this report. To the maximum extent permitted by law and without limitation Avison Young excludes all representations, warranties and conditions relating to this report and the use of this report. All intellectual property rights are reserved and prior written permission is required from Avison Young to reproduce material contained in this report.