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Mintel’s Month in Retail highlights the stories that have made headlines in the European retail markets over the past four weeks, with exclusive analysis from Mintel’s expert retail team on potential implications.

UK: Jaeger collapses into administration

Clothing retailer Jaeger has collapsed into administration after failing to find a buyer. Jaeger, which operated 46 stores and 63 concessions, had struggled in the face of strong competition on the high street and online.
The latest development is that Jaeger will close 20 loss-making stores and cut 200 jobs.

“Jaeger is the latest fashion retailer to have been hit by the slowdown in womenswear. The premium fashion retailer has been discounting heavily, with constant promotions undermining trust in its higher priced quality garments. Jaeger has failed to understand its core customer and has struggled to stand out in an increasingly competitive womenswear market, with women showing less loyalty to specific brands and more prepared to mix and match outfits from across price ranges and retailers.””

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UK: Tesco sells opticians business to Vision Express

The supermarket retailer has sold its opticians business as it seeks to simplify the business. Subject to approval from the Competition and Markets Authority, Vision Express will take on the entire operation, including 1,500 members of staff, following a consultation process.

“Tesco’s opticians sale can be seen as part of the general simplification of the UK business along with other disposals, but it also relates to Sainsbury’s sale of its pharmacies to Lloyds. The trend for so long had been to take full control of peripheral businesses, but they were never ones that Tesco or Sainsbury’s could reasonably expect to be market leaders. Now the pendulum has swung back and the trend at the moment is to sell them to experts. For the optical goods sector, this takeover is another stage in the concentration of the market into the hands of major multiple chains. Vision Express, which will become the nation’s second biggest player, is likely to rebrand its Tesco Opticians. The company might lose some of its existing Tesco Opticians customers, but it will probably gain a new audience of higher-spending and more brand-conscious customers. ””

France: Casino progresses in France

Casino’s total group sales rose 11.6% in the first quarter of 2017. In France, gross food sales rose 2.0%, while in Latin America organic sales increased 7.7%. Cdiscount (the second largest e-commerce operator in France after Amazon) grew net sales by 2.8%, but its total sales (including its marketplace) were up 7.7%.

“Good results overall, but mainly due to the strong performance in Latin America. Casino has been reducing its hypermarket space as this format continues to underperform in the country. Non-food sales in particular have been falling, a problem which is affecting all the operators in this area, in part due to the growth in online shopping but also due to changes in how people shop. Growth areas for Casino’s hypermarkets were fresh foods and organics and well as the Drive click-and-collect service.”

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France: Feelunique acquires The Beautyist

Online beauty retailer Feelunique has acquired French online beauty company The Beautyist. The acquisition forms part of the company’s strategy to become a leading player in France.

“Online sales currently make up a relatively small part of the beauty sector in France, meaning there is plenty of opportunity for it to grow and develop. Mintel research finds that 48% of French internet users who had bought beauty or personal care items over the last year had done so online, with 19% shopping at a specialist beauty chain and 13% at an online-only retailer. This acquisition offers FeelUnique a great opportunity to establish itself as a leading specialist online, taking advantage of The Beautyist’s strong social following.”

UK: House of Fraser like-for-like sales grow 0.9%

The department store retailer has reported flat sales at £1.3bn for the year to 28 January 2017. Like-for-likes edged up 0.9%, driven by strong performance in beauty and branded sales – up 4.1% and 3.6% respectively. Womenswear sales fell 0.6%; however, House of Fraser reported growth in all other categories.

“House of Fraser is the latest department store to have highlighted the importance of moving the focus away from purely retail towards more of a lifestyle experience. The retailer plans to add champagne bars and yoga studios to its stores in order to create a space where customers will want to spend more time. House of Fraser has seen slowing sales as womenswear sales declined 0.6% during the year-ended January 2017. As its own brands underperformed, it is important for the new womenswear offer to stand out in terms of design to give it a unique selling point in an increasingly competitive market.”

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UK: March retail sales decline 1.0%

According to the BRC-KPMG Retail Sales Monitor, UK retail sales decreased by 1.0% year-on-year on a total basis. On a like-for-like basis, sales fell 0.2% in March, representing flat growth on March 2016.
“It’s easy to blame the timing of Easter for what are disappointing figures. The question, as ever with numbers like this, is “are they exceptional, or are they another sign of an underlying slowdown in spending?” Last year, Easter straddled the end of March, while the year before it was in April. Last year, retail sales figures for March were weak, given that they should have had an Easter boost, so these figures come on a relatively poor comparison. Consumer confidence is holding up well, but with rising inflation, real incomes growth has just crossed into negative territory. Consumer credit is still growing strongly, as highlighted in Mintel’s UK Retail Banking, 2017 and the Consumers and the Economic Outlook, April 2017 reports. We expect consumer demand to weaken in the second half of the year, but when will that weakening start? It is tempting to see these disappointing figures as the beginning of that downward trend. The timing of the bank holidays always distorts the comparisons and a late Easter and the current spell of fine weather are very good news for retailers (especially fashion and DIY), so the April figures should look very good.”