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Two weeks in retail - 14th July

The past fortnight has largely been dominated by Marks and Spencer whose very public AGM saw shareholders criticise both food and clothing ranges on the same day the retailer announced an overhaul of its management and a 6.8% fall in first quarter sales of general merchandising.

It has appointed former Debenhams and Jaeger chief executive Belinda Earl to the newly created role of style director and promoted Sacha Berendji from general merchandise merchandising director to director of retail. Meanwhile former food executive director John Dixon takes takes on Kate Bostock’s responsibilities after her departure was announced.

Director of retail Steve Rowe has been promoted to replace him. This week the company has also announced the appointment of Carole Boyes-Weston from High Fashion UK as head of design for its Per Una and Limited Collection womenswear brands.

Sales continue to struggle in the retail sector. Latest figures from the British Retail Consortium-KPMG Retail Sales Monitor showed a like for like sales rise of 1.4% in June with the Jubilee weekend sending customers shopping. The figures compared to a 0.6% fall the previous year. It said total sales for the month were up by 3.5%.

However what BRC director general Stephen Robertson described as a “bunting boost” was only temporary with the remainder of June tough for retailers and total sales growth between January and June no higher than last year according to Robertson.

That was supported by similar evidence from the Retail Traffic Index, compiled by Ipsos Retail Performance, which monitors shoppers in non-food stores. It showed a small upturn in June as a result of the Queen’s Diamond Jubilee and footfall up 5.5% for the same week in 2011. However shopper traffic was then quiet until the beginning of the Sale period at the end of June. The week beginning 24 June was the second busiest of the year so far, although it was 1.4% down on the same week last year.

In food Nielsen figures showed a 12.5% year on year growth in the week leading up to the Jubilee but only 3.8% for the four weeks ending 23 June with the quarter the worst early summer period for year on year sales growth since 2005.

There was some good news for shoppers in that shop price inflation dropped to the lowest rate in two and a half years. The BRC-Nielsen Shop Price Index showed that shop price inflation slowed to 1.1% in June, down from 1.5% in May. Food inflation fell to 3.5% down from 4.3%.

The figures are supported by the latest figures from the Office for National Statistics today that said inflation fell to 2.4% in June – down from 2.8% last month and the third month in a row it has fallen. The dip is the largest May to June dip recorded since the launch of the CPI measure in 1996.

The ONS attributed part of the fall to earlier than usual Sales for fashion retailers with a 4.2% fall in the clothing and footwear categories. Clothing sales are reported to be flat on last year and the fortnight saw SuperGroup, owners of Superdry, reveal the extent of the profit fall it had warned against earlier in the year.

For the year to April 29 it said pre-tax profits fell 14.7% to £42.8 million, blaming problems with a new warehouse management system, and increased prices in cotton, distribution and internet marketing. However sales climbed nearly a third up 31.9% to £313.8 million.

Primark also saw a rise in sales with a 16% uplift for the 40 weeks to June 23 despite saying it had seen greater variability in its usual monthly sales pattern as a result of the unseasonal weather. It said sales had been particularly weak in April however.

And ASOS also saw a jump in sales - up by nearly a third in the first quarter with a 31% rise to £136.9m in its first quarter.

Retailers are still hoping for an Olympic boost to trading with less than two weeks to go and at John Lewis the retailer said that had started to have an affect with the department store group attributing that as the reason for a electricals and home technology rise in sales of more than a third year on year for the week to July 7. Whether the spending predictions of experts are realised remain to be seen.

One person who was shopping over the fortnight however was Theo Paphitis, owner of Boux Avenue and Ryman stationers, after he bought hardware specialist Robert Dyas through an Open All Hours inspired wholly owned company called Gladys Emmanuel Ltd. He will join the retailer’s board as chairman with existing chairman Geoff Brady leaving the business.

There have been further job changes in the sector. Jessops chief executive Trevor Moore is to be replaced by chairman Martyn Everett, while Tesco chief executive of retailing services Andrew Higginson is to join the boards of N Brown and Poundland.

At Blacks, which was acquired by JD Sports earlier this year, Cotswold Outdoor buying and merchandising director Ken Reeve is to become managing director.

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