As a result of the senior management changes made today, and therefore the potential for speculation ahead of the half-year results announcement, the Board believes it appropriate to provide an update on recent trading. The statement below indicates the current position of the UK Retail division. The International and Financial Services divisions continue to perform in line with expectations, and the half-year results will be published on 7 November.

UK Retail Trading Statement

UK Retail sales in the 24 weeks to 16 September were up 0.8% on last year.

A sales analysis is given below, with the performance for the first 15 weeks announced at the time of the AGM in July shown for comparison. Like-for-like sales are shown in brackets.

24 weeks to 16 September
15 weeks to 15 July
Total General
-0.3%* (-2.8%)
+1.2% (-1.2%)
+2.3% (+0.8%)
+2.7% (+1.3%)
Grand Total
+ 0.8% (-1.2%)
+1.8% (-0.2%)
(Like-for-like sales are estimated by comparing total sales with new and extended stores excluded.)

* General sales have been reduced by an estimated 1.2% (£21 million) as a result of last week's fuel dispute.

Compared to previous years, we made deeper reductions at the start of the summer sale. This was effective in clearing a higher volume of end of season stock, but the cost of reductions was £23 million more than the comparative period last year. The changed buying practices are delivering the expected benefits, but the higher reductions offset the greater part of the buying benefits achieved in the first half.

There are other factors affecting the net margin in the first half, which were not present in the comparable period last year, and which will not recur in the second-half, specifically:

  • Additional marketing costs of an estimated £15 million due to the recent re-launch of the brand and the set-up expenses of the new marketing division.

  • The revenue costs of £13 million associated with 22 new concept stores (20 refurbished stores and 2 new stores), that will open in October and November. Sales in the three concept stores already opened (Sutton, Fosse Park and Kensington) are, in aggregate, 16% ahead of last year's figures, since opening in the new format.

The full year results will benefit from sales of the 22 new concept stores, the escalating benefits of new buying policies, and the absence of the non-recurring costs listed above.