20 Sep UK MARKET HIGHLIGHTS – SEPTEMBER 2018
Every month B.D.C. gives you the key retail information you should not have missed. Key trends, innovation, major players, startups, market figures – discover in 60 seconds the latest key retail news.
Earlier this month, B.D.C. gave you a quick summary of the key information you shouldn’t have missed this summer. Now here is an overview of what happened the last two weeks:
- According to the Office for National Statistics, British shoppers spent more than expected in August. Retail sales grew by 0.2% across all sectors, whereas they were expected to fall by 0.2% after July strong results. The quantity bought in food stores and clothing stores respectively decreased by 0.6% and 1.9%. Yet, other non-food stores and household goods stores recorded an increase of 2.8% and 4.5%.
- Online expenditures continued to flourish to reach a new record proportion of 18.2% of all retail sales. In particular, department stores online sales reached a proportion of 18.4%. Despite the ongoing difficulties and the rise in business rates, retailers with a strong online presence managed to weather the storm better than their high street counterparts.
- In its 2018 Payments survey, the British Retail Consortium (BRC) found that more than 75% of UK retail transactions are made by card for lower-value purchases. Just 22% of transactions involve cash. However, this change came with a cost for retailers as they largely pay to process card payments. Card scheme fees have risen on average by 39% in 2017, which amount to an added £170 million cost for retailers.
- Tesco unveiled yesterday the first one of its new discount stores Jack’s, months after announcing its launch in February. Jack’s stores will sell only 2,600 products, including 1,800 branded “Jack’s” – instead of the usual 35,000 in a traditional Tesco supermarket. It will mainly offer products from British suppliers and will give clear information on products, at the best price. With this new brand, Tesco aims to face Aldi and Lidl in their sector, lowering its prices even more. The retailer plays on a long-term strategy as Aldi and Lidl today own 1,300 stores in the UK and total 13.1% market share.
- Argos has combined its click & collect services with voice commerce, as 6 in 10 of its orders start online but 80% of it are picked in-store. The new service allows customers to order among 20,000 products via their Google Assistant. They can then pick it up the same day from one of 850 Argos stores, rather than wait for a delivery. Voice search can also be used to check the availability of a product or find the nearest store. Many retailers (Ocado, Tesco, Amazon…) have already enabled voice search for home delivery but Argos is the first one to combine it with click & collect.
- Spanish fashion group Inditex shows record sales and profits for the first semester despite tough retail conditions on the high street, reporting a 3% rise in income to £1.2 billion. This marks its highest half-year results. The retailer opened 44 stores in the first semester, totaling 7,422 outlets across 96 markets. It is only selling online in 49 markets but plans to expand its online business worldwide by 2020.
Last year, Instagram globally launched “Shopping features” across its app to let people discover and consider possible purchases before clicking through to check out on the merchant’s website. As 90 million people tap its Shopping tags each month, now a designated “Explore” shopping channel and shoppable Stories will ensure that Instagram users proceed to purchase. And with 25 million businesses on Instagram but only 2 million advertisers, the app has room to massively increase its revenue.