Retail has always been a highly dynamic industry, intensely competitive and fighting for a share of the wider consumer spending pot. This is an industry used to dealing with a constant diet of change. However, the change we are seeing today is far more profound than anything the past has thrown up. We are now seeing by far the most challenging period in retail history. A reshaping of the industry’s structure and economics is unfolding, and most of the real change is yet to happen.

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Monthly Archives: May 2017

Tesco, Booker, Days, M&S and Body Shop

A quick tour around the retail week so far provides some interesting stories. Here are some, with some rapid response views. The CMA finally tells us what we already knew – it will spend ages and lots of our taxes in looking at the Tesco Booker deal. I’m clear – it should not be allowed because it will give Tesco too much power. Who actually owns Booker’s C-stores is far less important than who supplies them. The whole point of being part of a buying group is to “benefit” from concentrated sourcing. The CMA should do its job, protect the consumer, and red card the deal.

Days Department Store may be a store with departments, but that does not make it a department store. Arcadia’s Outfit stores incorporate Philip Green’s brands but that too isn’t a department store. I can’t see the traditional Jaeger customer shopping next to a Peacocks shopper, or a traditional Jane Norman shopper. The various brands will converge, otherwise putting them side by side will not work.

The newly appointed M&S Strategy Director seems to have no actual retail experience. The newly appointed head of Marks’ clothing has no apparel experience. This is a market where even those with loads of experience are struggling. And before you say “well, sometimes you need an outsider”, that never applies to surgeons or pilots. However, it does seem to apply to Presidents of the USA so maybe these appointments will be a raging success!

Finally, the process to sell Body Shop is nearly at an end. I have always thought this business would be worth more as a brand (with freedom to supply any stores) than as a retailer. So far this year it has been on sale in all but 3 weeks, materially more than the same period last year. Trading is clearly tough, but this also reflects maximising cash to ratchet up the price. How much that will compensate for all those expensive leases remains to be seen.

** We advise retailers on strategy and analytics. We also track promotional activity across the UK’s key retailers. Get in touch for details

Promotional Intelligence

2017 Week 20

Non-food retailers on promotion this week: 55%
Equivalent for same week last year: 56%
  • This week’s index is up from last week’s 51%, all but closing the yoy gap that had emerged
  • Yesterday’s inflation numbers increased but having dipped briefly below 50% in week 17, discounting has crept back up again over the past 3 weeks

  • Fashion (to 48%) and footwear (to 25%) are the prime movers, along with stationery
  • Department stores are unchanged overall week on week, but are well up yoy
  • John Lewis went full price this week (after 5 on sale) – Fenwicks did the exact reverse with several price promotions, following 5 weeks at full margin

  • Will the index follow the 2016 pattern and reach 60% next week?
  • While the overall yoy gap has narrowed, fashion promos are trending a little lower this year and this is likely to maintain the index a little behind 2016

** We track promotions daily by sector and company to support promotional optimisation programmes – for details contact

Kicking the discount drug

This is the most promotional retail market we have ever seen. And it’s driven by retailers, who are teaching consumers to only buy on discount. If you think this sounds crazy you’d be right.

Price promotions on this scale (63% of non-food retailers have been on sale in the 19 weeks of 2019 to date) are not just margin diluting but erode the essence of trust retail brands are built on. When revenues are falling short, leadership teams often allow overall strategy to be overridden by the need to turn stock into cash. Hence the rather suicidal trading that has become the new normal.

A growing number of retailers recognise the unsustainability of almost permanent discounting and are trying to bite the bullet. M&S has been trying to wean itself off the discount drug and our promotional tracking data shows they have been extremely successful. In 2016, M&S traded at full price for just 2 out of the first 19 weeks of the year. This year is totally different. Promotions have been very focused, starting with a Spring promotion in the second week of March through to Mother’s Day. Marks has traded at full price in all but 4 weeks of the first 19 of 2017 and this well undoubtedly be reflected in its upcoming results on 24th May.

John Lewis’s Never Knowingly Undersold policy actually commits it to discount when its rivals do. A natural consequence of this is to reduce its ownership of its own pricing strategy. Over the years JL the commitment has changed because 92 years ago, John Speden Lewis didn’t forsee online – it is only applied to High Street rivals. With online now almost 25% of total non-food sales the promise is inevitably diluted further every passing year.

A feature of this retail market is the apparent diminishing control leadership teams really have. I believe discounting is a major symptom of this. The winners will be retailers able to withstand the temptations and stick to their strategic guns.

** We track promotions by sector and by company daily and advise on promotional calendar optimisation for details

Promotional Intelligence

2017 Week 19

Non-food retailers on promotion this week: 51%
Equivalent for same week last year: 58%
  • Price promotions fell from 54% last week, with a larger fall YoY …
  • … but the trend shape is still broadly following last year’s pattern

  • Fashion, home furnishings and jewellery have led this week’s fall in price promotions
  • Moving in the opposite direction is department stores, with Liberty back on promo with a jewellery offer after a two week break
  • While discounting fell in both value and middle markets, the premium sector rose this week

  • While many retailers are trying to reduce discount days, soft consumer demand continues to pressure cash flow, itself depressing revenues but also making going cold turkey on full price challenging
  • We still see only sporadic evidence of cost price increases being passed on to consumers

** We track promotions daily by sector and company to support promotional optimisation programmes – for details contact

Promotional Intelligence

2017 Week 18

Non-food retailers on promotion this week: 54%
Equivalent for same week last year: 57%
  • As forecast, our non-food promo index has ticked up again after the late Easter
  • Last week’s dip was timing, not the start of a gradual return to full margin

  • Week 18 shows a return to the converging YoY trend in promotions
  • Increases are led by department stores and fashion retailers
  • New Look were on sale every week this year until week 9 (5th March). Been at full price since, returning to sale this week

  • We expect the next few weeks will stabilise around the mid 50s, moving towards 60% as June approaches.
  • Later in June (around week 25) fashion begins Summer sales. If last year’s trend is followed, the index will move up into the 70s ie 70% plus retailers on sale

** We track promotions daily by sector and company to support promotional optimisation programmes – for details contact

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