Today’s news in brief-19/1/24

In December 2023, the Office for National Statistics (ONS) reported a significant 3.2% drop in retail sales volumes in the UK. This decline marked the most substantial monthly decrease since January 2021, following a modest 1.4% increase in November 2023. On an annual basis, sales volumes in 2023 fell by 2.8%, reaching their lowest levels since 2018. Non-food store sales volumes, a key indicator, witnessed a 3.9% decline in December, particularly impacting department stores with a substantial 7.1% decrease. Other non-food stores, including those selling sports equipment, games, toys, watches, and jewellery, also experienced a notable 4.5% reduction. Marks & Spencer (M&S) unveiled plans to invest £30m in bricks-and-mortar stores across Scotland. This substantial investment includes the opening and expansion of more than five stores over the next 18 months. The flagship project involves a £15m investment in M&S Aberdeen Union Square, set to double in size and introduce new features such as a flower shop, a cheese barge, a larger in-store bakery, and a dedicated M&S Wine Shop. M&S's commitment to Scotland goes beyond physical stores, with a focus on sourcing more Scottish produce, reflecting confidence in the region's retail market. DFS reported a 5.6% year-on-year drop in gross sales during the 26 weeks ending December 24, 2023. The company attributed this muted performance to record hot weather in September and October, leading to weak footfall and demand. Consequently, DFS downgraded its full-year sales forecast to a range of £1.02bn to £1.04bn, compared to the previous range of £1.06bn to £1.08bn. Despite the sales setback, DFS maintains confidence in delivering its pre-tax profit guidance of £30m to £35m, supported by progress on gross margin and cost base improvements. Birkenstock reported a robust financial performance, with a 20% increase in revenues to €1.49bn for the year ending September 30, 2023. European sales played a significant role, contributing to an 18% increase in the region. The company also saw positive figures in EBITDA, which rose by 11% to €483m. While net profit for the period experienced a decrease, adjusted net profit rose to €207m. Looking ahead, Birkenstock expects revenues to be in the range of €1.74bn to €1.76bn, reflecting a 17% to 18% overall revenue growth compared to fiscal year 2023. Wickes is set to make all store management roles open to flexible working, following a successful six-month pilot across 14 stores. Partnering with Timewise, the retailer aimed to understand barriers and design a flexible working model. Results from the pilot demonstrated no negative impact on store performance or KPIs, with 96.5% of store managers satisfied with their working hours. Wickes emphasises the importance of work-life balance, employee satisfaction, and attracting diverse talent through this initiative. The Pepco Group reported record Q1 revenues of €1.9bn, up 10.8%, driven by new openings. Despite a 2.3% decline in like-for-like revenues, Poundland experienced a 0.9% LFL growth. Dealz, however, faced a 4.6% LFL decline. Looking ahead, Pepco warns of disruptions in the Red Sea impacting freight costs but expresses confidence in continued gross margin improvement. Andy Bond, Executive Chair of Pepco Group, emphasises positive progress against the renewed strategy outlined in October, focusing on profitability and measured, profitable growth.