Today’s news in brief-8/11/23
JD Sports is facing scrutiny over a £3.5m non-compete deal with its former CEO, Peter Cowgill. This agreement, signed in September of the previous year, was intended to prevent Cowgill from working with or advising competitors for the next two years. However, it has come to light that Cowgill has invested in Fortitude Brands, a sports equipment maker, with at least a 25% stake in the business. This has raised questions about whether he is upholding the spirit of the non-compete agreement. Cowgill, who stepped down from his role in May of the previous year, is also considering a return to the retail industry after being approached by a private equity firm to head a menswear brand.
Bensons for Beds has reported a 7% Like-For-Like (LFL) sales growth for the year ending September 2023, defying challenging market conditions. This positive performance follows a consistent sales progress in all four quarters, a testament to the success of the retailer’s transformation strategy. Additionally, Bensons’ e-commerce channel saw an impressive 22% year-on-year increase, attributed to investments in omnichannel capabilities. The company’s expansion strategy included the opening of 14 new stores across the year, marking a strategic re-entry into markets such as Peterborough and Speke, as well as new catchments in Edinburgh, Craigleith, and Edrington. Notably, the retailer also experienced growth in market share for its core categories, and achieved a 15% increase in Net Promoter Score (NPS) following significant investments in customer service and delivery experience.
Marks & Spencer (M&S) has announced a remarkable 75.3% surge in pre-tax profits for the first half of the year, totaling £360.2m, up from £205.5m in the previous year. Both the Food and Clothing & Home segments of the business exceeded market expectations. Overall sales for the period increased by 10.8% to £6.1bn, demonstrating a strong performance across the board. Food sales experienced a substantial growth of 14.7%, with Like-For-Like (LFL) sales up by 11.7%. This was attributed to investments in trusted value, category resets, and product quality upgrades. The Clothing & Home division also saw positive growth, with sales increasing by 5.7% and LFL sales up by 5.5%. In-store sales outperformed online sales, which grew by 4.6% due to strong full-price sales and the expansion of click and collect services. International sales increased by 3.9%, and Ocado retail sales saw a notable 6.9% increase, supported by the Big Price Drop campaign.
Poundland has completed the transition to new clothing ranges in 560 stores across the UK and Ireland, signalling a strategic expansion in its family fashion offerings. The move involved doubling the space dedicated to baby clothes and increasing kidswear by 50% in stores that stocked clothing. Additionally, Poundland introduced new ranges in its lifestyle and athleisure brands, Cardio Bunny and Bekkin. This transition to clothing powered by Pepco has allowed Poundland to strengthen its promise of providing exceptional value to customers. Internal pricing surveys indicated that the new ranges offer significantly better value compared to key competitors such as Primark, George at Asda, and F&F at Tesco. On average, the switch to a range powered by Pepco enabled Poundland to reduce average selling prices by 10%.
Lidl GB has become the first supermarket to implement body-worn cameras across all its stores. This measure, amounting to an investment of over £2m, aims to address the growing issue of retail crime. While other retailers have experimented with similar technology, Lidl is the first to ensure that all staff members are equipped with body cameras as a standard safety measure. The rollout is set to be completed by Spring 2024, following training provided to colleagues to ensure the cameras are used safely and with due consideration for privacy.
The British Retail Consortium (BRC) has welcomed the government’s commitment to reducing inflation, as outlined in the recent King’s Speech. However, the BRC has expressed disappointment at the omission of retail crime from future crime legislation. The organisation has called for a freeze in business rates during the upcoming Autumn Statement, citing the potential rise of £470m per year in the burden on retailers in 2024. The BRC emphasised the critical role business rates play in decisions regarding new store openings, job creation, and investments in town and city centres. The King’s Speech also introduced several bills, including one for longer sentences for dangerous offenders, but made no mention of legislation addressing retail crime. The BRC urged the government to take decisive action to combat the rising incidents of violence and abuse against retail workers.
