SWL's Retail Radar - 05/12/24

Retail Radar, from SWL, provides you with a snapshot of the latest retail news from the UK and around the globe. These narratives highlight key events, emerging trends, and notable advancements, providing a deep dive into the dynamic retail landscape.

UK Retail sector sees a dip in sales before the key festive period

The crucial trading period leading up to Christmas began on a challenging note, with cautious consumer behaviour contributing to weaker November sales.

According to the latest data from the British Retail Consortium (BRC), overall sales declined by 3.3% in November, a sharp contrast to the 2.6% growth recorded during the same period last year. This figure also exceeds the 12-month average growth rate of 0.5%.

While food sales saw a year-on-year rise of 2.4% over the three months to November, this was significantly lower than the 7.6% growth seen in 2023 and fell short of the 12-month average of 3.7%. In contrast, non-food sales decreased by 2.1% over the same three months, driven by a steep 10.3% decline in online non-food purchases.

Chief Executive of the BRC, Helen Dickinson, highlighted that the sluggish start to the festive season was partly due to Black Friday sales being included in December’s figures this year. However, subdued consumer confidence and rising energy costs also weighed heavily on non-food spending. Spending on winter clothing was particularly weak as households deferred purchases, while health-related spending saw a boost due to seasonal illnesses.

Retailers are now pinning their hopes on the possibility that shoppers are merely delaying their spending rather than cutting back entirely, with expectations of a late surge in activity as Christmas approaches.

Linda Ellett, Head of Consumer Retail and Leisure at KPMG UK, noted that while November’s results appear disappointing, they do not account for the impact of Black Friday week. Retailers remain optimistic that late-November promotions prompted delayed spending to materialise. Without this, however, some may feel pressure to bring forward Christmas sales in an effort to recover lost ground.

Waitrose launches its first convenience store in six years

Waitrose & Partners has launched its first new convenience store in six years as part of its strategy to grow its network and strengthen its collaborations with Welcome Break and Shell.

The latest Little Waitrose outlet, located in Hampton Hill, southwest London, marks the supermarket’s 47th company-operated convenience shop.

This expansion aligns with Waitrose’s broader plans to increase its presence, particularly through its partnership with Welcome Break. New stores are set to open in Spaldwick, Cambridgeshire this month, and Rotherham, South Yorkshire in January. A third site is expected in 2025, with further locations contingent on the success of these ventures.

While the company is concentrating on establishing smaller convenience outlets around 3,000 square feet, it is also considering larger sites of up to 6,000 square feet to diversify its offering.

The Hampton Hill store introduces a new feature, a collection hatch designed to facilitate easier pick-ups for delivery drivers, reinforcing the importance of its partnerships with Deliveroo, Uber Eats, and Just Eat Takeaway.com.

James Bailey, Waitrose’s Executive Director, noted that traditional perceptions of food available at service stations and forecourts are changing, with modern customers expecting high-quality, great-tasting food wherever they shop. He emphasised that through new store launches and strategic partnerships, Waitrose will continue to enhance its offerings and extend its reach to new areas, ensuring that more customers can access its renowned quality, value, and service.

Adrian Grimes, Commercial Director at Welcome Break, stated that their collaboration enables travellers to enjoy a wide range of premium Waitrose products during their journeys. He expressed optimism about expanding the partnership with more Little Waitrose locations across the Welcome Break network in the years to come.

In addition, Waitrose has surpassed 100 Shell forecourt stores supplied across the UK, with plans for further openings in 2025, reinforcing its growing presence in this sector.

Morrisons transitions to in-store fulfilment using Ocado’s technology

Morrisons is set to leverage its long-standing partnership with Ocado Group to reshape its online grocery operations, transitioning towards greater reliance on in-store fulfilment. This marks a strategic shift for the supermarket chain as it adapts to evolving consumer demand and optimises its digital offerings.

The partnership, which began in 2013, will see Morrisons gradually phase out deliveries from Ocado’s Erith fulfilment centre in the South East. Instead, the retailer plans to increase output from Ocado’s Midlands-based Dordon facility and expand its use of Ocado’s AI-driven in-store technology to process online orders more efficiently across its store network.

Rami Baitiéh, Chief Executive of Morrisons, attributed this move to rising demand for the company’s online services. He mentioned the importance of Ocado’s expertise and technology in enabling the supermarket to manage its growing online volumes. By enhancing in-store fulfilment capabilities, customers will gain greater access to Morrisons’ signature Market Street offerings.

The CEO assured customers that Morrisons.com will continue to serve all areas of England, Wales, and Scotland, with no disruption to service.

Tim Steiner, Chief Executive of Ocado, praised the partnership, underscoring how Ocado’s advanced technology and infrastructure support Morrisons in delivering a leading online grocery experience. As Morrisons scales down operations at Erith and bolsters other parts of its network, Steiner emphasised the shared goal of ensuring seamless customer service and capturing further market share in the UK online grocery sector.

Steiner also noted that reducing activity at the Erith site will benefit Ocado’s broader online operations by freeing capacity for growth. With this move, Ocado Retail can achieve higher utilisation of its existing facilities without requiring additional capital investment, creating new opportunities for short-term expansion.

A new INTERSPAR hypermarket bakery has opened in Marchtrenk, Austria

SPAR Österreich has introduced a state-of-the-art baking facility in Marchtrenk to support its INTERSPAR hypermarkets and select stores.

The €19.7 million project was completed in just over a year and spans 3,800 square metres across two levels, including a dedicated 70-square-metre baking area. This modern bakery will produce 130 varieties of bread, pastries, and confectionery items, supplying INTERSPAR hypermarkets and a selection of SPAR and EUROSPAR outlets across Upper Austria and Salzburg.

Strategically located near SPAR Austria’s regional headquarters, the facility has been designed to streamline logistics and foster operational efficiencies. It combines cutting-edge baking technology with traditional methods, featuring advanced ovens, including an eight-day oven and four rack ovens, to ensure efficient production of premium-quality baked goods.

Sustainability is central to the design, with the facility operating entirely without fossil fuels. Innovations include heat recovery systems that capture energy from oven exhaust and refrigeration processes, reliance on 100% green electricity, and the use of natural CO₂ as a refrigerant.

Currently employing 38 bakers and confectioners, the bakery plans to recruit an additional 17 staff members and, from 2025, will offer apprenticeship opportunities for aspiring young professionals in the trade.

Johannes Holzleitner, Managing Director of INTERSPAR Austria, highlighted the facility’s blend of craftsmanship and innovation. He noted that the bakery sets a new benchmark by delivering high-quality products through a production process that prioritises sustainability.

Pets at Home unveils its next-generation flagship Pet Care Centre in New Malden

Pets at Home has officially launched its flagship Pet Care Centre in New Malden following a £2.2 million redevelopment, marking the largest single investment in the company’s history.

Unveiled on Friday, 29th November, the new 27,360-square-foot centre redefines pet care with state-of-the-art facilities, expanded services, and innovative spaces designed for pets and their owners.

The opening event featured a lively celebration, including games, selfie opportunities, 500 complimentary goody bags, and a Golden Bone treasure hunt in Raynes Park Sports Ground and Taunton Avenue, where participants had the chance to win £50 gift vouchers.

The revamped centre boasts a wide array of new features. The Nutrition Hub offers an extensive range of fresh, frozen, and raw food options, alongside a treat bar and expert feeding advice. The Health Centre provides access to essential medications, free weighing scales, and everyday healthcare guidance.

It also includes the largest Live Pet Zone in the company’s portfolio, featuring interactive areas for small animals, reptiles, and aquatics, as well as educational workshops and digital displays. The upgraded Grooming Salon has increased capacity, with six tables, three baths, and a dedicated pre-groom Check Point.

A Community Zone has also been added, offering workshops, advice, recycling points, and spaces for charity donations.

Veterinary services have been significantly enhanced at the newly rebranded Vets for Pets practice. The facilities now include six consultation rooms, separate wards and waiting areas for different species, an upgraded imaging suite and dental facilities, a second operating theatre, and expanded nurse consultation offerings.

Store Manager Bart Kemal stated that the centre is much more than a store, describing it as a special space that celebrates the joy of owning pets.

Practice Owner, Michelle Akande, at Vets for Pets New Malden, expressed her excitement about the upgraded facilities and reaffirmed the team’s commitment to providing top-quality care for pets and their owners in the area.

Ruggable partners with John Lewis to introduce its first UK in-store offering

Ruggable, the innovative washable rug brand founded in the US in 2017, has announced its first in-store presence in the UK through a new retail partnership with John Lewis & Partners. This marks a significant shift for the brand, expanding beyond its direct-to-consumer roots and bringing its products into physical retail for the first time in the UK.

From early December, Ruggable rugs will feature in a dedicated display at the John Lewis flagship store on Oxford Street in London. This in-store experience builds on the partnership formed earlier this year, which saw Ruggable’s products launch on the John Lewis website and app in September. Customers can now explore 115 designs in Ruggable’s signature flatwoven chenille texture, available in various shapes and sizes, including bathmats and doormats. The collection features Ruggable’s own creations as well as popular licensed designs from names like Morris & Co., Iris Apfel, and Jonathan Adler.

At the core of Ruggable’s appeal is its two-piece system, which combines a lightweight washable Rug Cover with a non-slip Rug Pad. This design makes the rugs stain-resistant, water-repellent, and ideal for busy households. From living rooms to kitchens, the system offers both practicality and style.

Clay Wertheimer, Vice President of Ruggable UK & Europe, expressed enthusiasm for the partnership with John Lewis, highlighting the opportunity for UK customers to experience the brand's products in person for the first time. He noted that the move to an omnichannel approach aligns with Ruggable’s broader goal to accelerate its growth in the UK and connect with a wider audience familiar with the trusted John Lewis brand.

In addition to its retail partnership, Ruggable has expanded its UK presence with a launch on Amazon UK, offering 63 designs since mid-November. The brand has also unveiled a collaboration with British designer Matthew Williamson, introducing a six-piece collection—the first developed exclusively by Ruggable’s UK team.

All UK orders are manufactured and dispatched from Ruggable’s Birmingham facility, which also serves as the hub for its European operations. From this site, rugs are delivered to customers in France, Germany, the Netherlands, Sweden, and Finland, reinforcing the company’s expanding presence across Europe.

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