Some positive news this week, as the UK economy managed to exceed analysts’ expectations and achieve growth of 0.3% in Q1, thus avoiding an unprecedented triple dip recession, and providing a timely boost to sentiment after an uncertain beginning to 2013. Unfortunately, notwithstanding this progression, the UK’s GDP is still 2.6% below its pre-recession peak in the first quarter of 2008. For me those times seem like an eternity away, before I even started in this industry. The service sector was the main basis of growth in the first quarter, growing by 0.6% and contributing almost 0.5 percentage points to GDP. Sales in the retail sector fell in January and March, but a strong February helped it notch up growth of 0.3% overall in the quarter.
It has also been announced this week that high street sales volumes have fallen for the first time in eight months in April, which puts struggling retailers under further stress. The austere figures from the CBI indicate that the Easter bank holiday was unsuccessful in boosting the industry. It seems I am not the only one to have found the weather cold and depressing, as sluggish consumer spending has driven retail sales volumes lower in late March and early April. Online continues to outperform; johnlewis.com recorded £1bn sales in a rolling year to date last week. and debenhams.com has also experienced a surge in online sales – up 46 per cent in the six months to March 2.
Unsurprisingly, the weather hasn’t driven people away from the new under cover Land Securities shopping centre in Leeds. It has been announced this week that Trinity Leeds recorded the highest average spend of the Land Securities regional UK portfolio in its first month of opening. The 1m sq ft centre opened on 21st March, and according to Damian Sumner, Jones Lang LaSalle’s Head of In-Town Agency, the scheme ‘has transformed the city’s retail sector’. Impressively, in its first 30 days of trading, an average of 100,000 people have visited the centre each day. The centre has also recorded dwell times in excess of 96 minutes, stimulated by a strong leisure component, an essential component of any shopping experience, as this blog has previously discussed.
And finally, data released this week shows that supermarkets Waitrose, Aldi and Lidl have all posted record market shares in the last three months, highlighting the increasing polarisation in the grocery market. Waitrose reached its highest ever share of 4.9% in the 12 weeks to April 14th, whereas discount chains Aldi and Lidl reported shares of 3.4% and 3% respectively. This is indicative of changing consumer behaviour, partly as a result of the recession. Like me, many consumers are continuing to trade down on their weekly shop (who really needs taste the difference wholegrain rice?), but are leaving space in their budget to trade up for a few key luxury items; Friday night has always been steak night in my house, and that will never change.