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The departure of Mark Price from Waitrose is a surprise, more for its timing than anything else. He has been outstanding in his leadership of Waitrose during what has been the most challenging time in food retail for decades. He stood out years before then in various roles across most areas of the Partnership as he rose through the ranks. He has often been outspoken and has certainly been one of the more clear-sighted industry leaders as the economics of UK food retail have been transformed.

Like most careers, Mark’s is a series of “could have beens”. He could have landed at M&S as head of its food business, when Stuart Rose instead appointed Steven Esom – Mark would certainly have been a very strong candidate to succeed Rose as CEO there. He could have succeeded Stuart Hampson as Chairman of the Partnership, although Waitrose would have missed out on his transformational leadership. He could have landed as CEO of Morrisons. M&S and Morrisons would both certainly be in better places today had Mark gone to either.

He leaves Waitrose in good shape. Performance is under huge pressure because like every other retailer of food in the UK, the fundamental economics of the market are changing and virtually no one is making the money they were. Nevertheless, in his 10 years at the helm he has grown sales by 76%, adding around £2.4bn of revenues.

This is without doubt the most challenging time in modern retail history. Leadership is far too focused on the rear view mirror and needs to be looking forward. Mark is very good at that and the industry will be poorer for his departure.

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The latest interims from Tesco are mixed, as might be expected. A year after the true nature and scale of the company’s issues became apparent, the new leadership team has made clear and tangible progress. Tesco today is more focused, more transparent, has lowered prices and edited ranges. Some stores have been axed, some jobs culled and an altogether leaner, fitter business is emerging. Service levels are up and the customer is back at the heart of the company, having been sidelined and taken for granted for some time.

Nevertheless, the company is still losing share albeit more slowly. In this respect it is in the same boat as its immediate peers. The price gap with the discounters has been narrowed, but not enough to stem customer migration. Volumes are up, but my analysis shows it still lags the market at large. It is still significantly overspaced, and carries far too many SKUs. Tesco still has the biggest market share by far, but the competitive agenda is still being set by Aldi and Lidl and will continue to be for the foreseeable future.

The new economics of UK food retailing are uncomfortable for all the majors, and others too. Their slow response to the price threat came from underestimating the discounters and I think they still do. Rebuilding Tesco is well under way but much of what has happened so far has been about much better housekeeping. There is much more to do and managing expectations is vital. Returning to true market leadership is unlikely. Tesco’s announcement contains some green shoots but they are springing up in the woods.

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In these days of obsessive focus on LFLs or comparatives (comps in US retail-speak), it is always essential to pay as much attention to last year’s numbers as the latest ones. The fashion numbers being bandied about right now are set against an extraordinarily bad September/October trading period in 2014. With last  year’s September temperatures well above August’s, selling Autumn/Winter ranges became  seriously challenging. Persuading customers shopping in T shirts and shorts to buy coats and knitwear is tricky.

The numbers for last year reflected the weather. Clothing sales for September 2014 fell 4.1% by value, a loss of more than £170m. Volumes were down by 1.5% and would have been far worse without some aggressive discounting. Prices yoy were down by 2.6% and represented the highest discounting seen in the market for many years until then.

Against this very weak background we should expect to hear some very positive numbers being reported. These should not mask the markedly tighter retail market of 2015 versus last year. The 2.6% deflation of September 2014 proved to be the shape of things to come. While the weather returned to more normal levels in late October, consumer demand did not. Price deflation in the period since has averaged 2.2% and is trending higher, averaging 3.4% in the past 6 months.

LFLs are a good measure of underlying performance but only if one attaches the same importance to last year’s figures as this year’s. Don’t be fooled!

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My latest analysis of retail sales trends underlines the significance of Black Friday. The headline is that while November is becoming a more important month in the retail calendar, December is becoming a little less so. Swapping discounted sales in November for full margin sales in December doesn’t sound like very good business, and it isn’t.

I am forecasting that yoy, there will be an additional £2.5bn of consumer spend generated over the combined months of November and December. The rather less good news is that 60% of this growth will be sucked forward into November, virtually all at discounted prices. And of course, this is THE key trading period for the profitability of many retailers. While Christmas spend will be up 2.5% in December, that figure will be materially held back due to the cannabalisation of Black Friday.

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The news that American Eagle has opted to not open on either of the UK’s two premier shopping streets is very noteworthy. First, an American retailer coming here and taking a realistic view is a rarity. All too often, they do little or no research, pay far too much for space, and then feel forced to price too high in a naive attempt to make the economics work. So hats off to American Eagle who have priced sensibly, and not been seduced by the bright lights and promised riches of prime West End floorspace.

Does this say something about UK retail occupancy costs? Absolutely! The fundamental shift in UK retail trading economics has been underway for a while now, and it has much further to go. The reality is that the capacity of retailers to pay as much for space as they have in the past is in decline. Their margins are being squeezed and almost all are looking to product suppliers to help finance cost reduction. The idea that occupancy is somehow immune to this is fanciful.

Right now, most retailers’ store portfolios are delivering yoy LFL sales declines. Their positive numbers are relying on online, and that revenue is mostly earnings dilutive. I am NOT saying that no one can make money from stores any more, including prime locations. What I am saying however is that the decades-long upward-only easy money for landlords is over, just as it is for their retail tenants.

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