pulsed.top

UK shop prices drop as food inflation soars, British Retail Consortium reports

2025-10-18 05:41:03 By

UK shop prices experienced a dip in February, as heavy discounting across the retail sector partially absorbed the sting of elevated grocery costs.

The Shop Price Index from the British Retail Consortium (BRC) indicated that overall shop prices decreased by 0.7 per cent year-on-year last month, matching January's decrease, buoyed by a significant 2.1 per cent reduction in non-food prices, as reported by City AM.

Helen Dickinson, Chief Executive of the BRC, noted that "Discounting is still widespread in fashion as retailers tried to entice customers against a backdrop of weak demand," reflecting the aggressive tactics adopted to stimulate consumer interest.

Such discounting contributed to a 2.6 per cent climb in retail sales during January – significantly surpassing the 12-month average growth of 0.8 per cent.

Nevertheless, February's sales flattened out despite continued price cuts, underscoring the "much reported and very concerning long-term decline in the UK high street," according to Sophie Michael, Head of Retail and Wholesale at BDO.

In addition, Neil Bellamy, Consumer Insights Director at NIQ GfK, remarked that the cost-of-living crisis, which is "struggling with a cost-of-living crisis that is far from over," continues to affect consumer confidence negatively.

Inflation has been pouring into breakfast tables, with food inflation ticking up to 2.1 per cent year-on-year this February following upticks in the prices of staples like butter, cheese, and eggs. Dickinson cautioned that inflation is "likely to rise" throughout the year due to an imminent £5bn surge in expenses for retailers and overarching geopolitical tensions, forecasting a four per cent hike in food prices by year-end.

Mike Watkins, Head of Retailer and Business Insight at NielsenIQ, commented: "With many household bills increasing over the next few weeks, shoppers will be looking carefully at their discretionary spend and this may help keep prices lower at non-food retailers. Ofgem has already announced a higher energy cap from April, with prices set to rise by £9.25 monthly due to a spike in wholesale prices."

He added, "However, the increase in food inflation is likely to encourage even more shoppers to seek out the savings available from supermarket loyalty schemes."

Highly Recommended

DFS upgrades profit expectations as credit deals and new products spur demand

Cost savings, interest free credit options and changes to product ranges have helped furniture retailer DFS to upgrade full year profit expectations. New interim results for the Doncaster-based chain, which has about 115 stores across the UK and Ireland, show reported pre-tax profits leapt from £15.8m in the 26 weeks to the end of December 2024, compared with just £900,000 in the same period of 2023. Underlying pre-tax profit was £17m, up from £8.2m the year before. DFS made the gains despite revenue falling 0.1% during the period to £504.5m, which was due to use of interest free credit offers to entice customers. Gross sales were up 1.4% to £675.6m. Bosses said product innovation and partnerships with brands such as La-Z-boy had pleased customers and range changes across the firm's Sofology brand - acquired in 2017 - had driven higher order volumes. Order intake growth was 10.1% in a market said to be in slight decline. Meanwhile cost saving efforts meant the business is on track to make £50m annualised savings by its 2026 financial year. Tim Stacey, DFS group CEO, said falling interest rates will reduce interest free credit costs, helping the firm on its way towards its gross margin target and pre-pandemic level of 58%. He also said falling interest rates would help demand - which is about 20% below pre-pandemic levels - to recover thanks to more house sales. The performance means DFS has upgraded expectations of profit before tax and brand amortisation to between £25m and £29m, providing there is no further supply chain disruption of the type experienced in the Red Sea. Mr Stacey said: "Our improved profit performance in the first half is testament to the strength of our customer proposition, the dedication of our colleagues and our collective focus on operational excellence, evidenced through increased market shares and customer satisfaction scores.

Applied Nutrition seals USA and Holland & Barrett deals as its Coleen Rooney range expands across UK

Health and wellness brand Applied Nutrition has announced three new American deals – and an expanded partnership with Holland & Barrett that will see its new Colleen Rooney range go on sale in hundreds of UK stores. Knowsley-based Applied Nutrition has agreed a joint business plan with Holland & Barrett that will see the health and wellbeing retail chain increase the distribution of currently listed products and take a range of new ones. The Mersey firm said: “The first order under the new JBP was received this month and included the new Coleen Rooney range, which will be available in 500 stores” The deal will also see Holland & Barrett get early access to Applied Nutrition’s new products in development, allowing them to get products to their shelves more quickly. Applied Nutrition hopes the deal will treble its revenue from Holland & Barrett, already one of the group’s largest customers. In the USA, Applied Nutrition has secured deals with GNC Corporate, one of the largest specialty retailers in the US, Hy-vee, the largest regional grocery chain in the Midwest, and leading Texan grocery chain H-E-B. Applied Nutrition products will now go on sale in more than 1,000 new stores across the country, and the group says the deals “are expected to start contributing to revenue during H2 FY25 with an annualised spend of $3m”. Thomas Ryder, CEO of Applied Nutrition, said: “It is great to see such momentum with existing and new customers, further reinforcing the growth potential of the business. Not only are we significantly strengthening and growing our trade with existing key valued partners such as Holland & Barrett we are also securing new listings from major retailers in the US which is a key growth market. We look to the future with confidence and we remain focused on driving profitable growth throughout H2 and beyond.”

Gong Cha: Bubble tea brand to open 225 new UK stores in nationwide expansion

Bubble tea aficionado Gong Cha has unveiled ambitious expansion plans to launch over 225 stores in the UK, a move set to generate nearly 2,000 jobs, following a franchise agreement with Costa Coffee heavyweight Jinziex. Originating from Taiwan in 2006 and now headquartered in London, Gong Cha's partnership with Jinziex is a key part of its global strategy to hit 10,000 outlets by 2032, as reported by City AM. Jinziex, a nascent venture, is steered by a trio of industry experts: Diljit Brar of Goldex, Azha Rehman from Kaspa's Desserts, and Steve Falle, managing director at WY&SF Ltd. With a presence in 28 countries through more than 2,100 locations, Gong Cha currently operates 13 stores within the UK. Despite facing financial challenges as reported by City AM in September 2024, with sales declines in Korea, the US, and Australia, Gong Cha remains optimistic about its UK prospects. The first batch of Jinziex's Gong Cha stores are slated to open their doors in April, with locations including Sidcup, Gravesend, Romford, and Hornchurch. Paul Reynish, the global CEO of Gong Cha, expressed his enthusiasm for the UK market, stating: "Across Europe we continue to see fantastic interest from potential franchisees keen to bring the world's fastest-growing tea brand to their market." He added, "But where it mattered most to us was the UK, which is one of the most exciting markets for us globally." Reynish concluded with confidence in their new partnership: "After a careful selection process, we're delighted to partner with Jinziex – a proven and highly respected food and beverage franchise operator – who match our ambitions to become the clear bubble tea market leader in the UK. "As a market, the UK has huge potential for us. It's a market that is constantly evolving, ripe with innovation, and made up of consumers willing to try new and exciting products." "We firmly believe it is one of the most significant markets in the global F&B industry, and one of the reasons we relocated our global HQ to London in 2019." "Now, with our expanded footprint, we want to play a leading role in shaping the next decade of the UK's food and beverage industry, while cementing Gong Cha as a household name. We can't wait to show the UK how tea is meant to be." Diljit Brar, CEO of Goldex, added: "Gong Cha is a fantastic global brand with a truly unique customer offer that plays into the heart of changing consumer tastes and trends."

Historic Coventry shop to close after 100 years as owner says 'retail is also not as nice as it used to be'

A historic Coventry shop is set to close its doors permanently after more than a century in business. Tobacconist and lighter repair specialist Salts was founded by Harry Salt in Parkside, Coventry, in 1916 before relocating to New Union Street in 1961.It was run by the Salt family until it was taken over by Mark Kendall in 2019. Mark, a Coventry local, said he was "really sad" about the impending closure on March 29. He revealed that the decision to shut down was reluctantly made due to several factors. In an interview with Coventry Live, 49 year old Mark said: "Footfall never came back after COVID. Retail is also not as nice as it used to be because there are the issues of break-ins and theft and all those things that happen in city centres to retailers." He also highlighted the challenges posed by the illegal tobacco trade in the city. He said: "Coventry is rife with illegal stuff so the people selling it legally cannot compete." Despite the sadness surrounding the closure, Mark said he had relished his time at Salts. He said: "I have loved it! I always wanted to run a shop, so I have really enjoyed it." Customers have been sharing their 'fond memories' of visiting Salts. Many nostalgically recalled trips to the city centre with their grandparents many years ago, Mark said. He added: "It is quite generational, so a lot of people have fond memories of relatives, they used to come here as children with their grandparents, so obviously it holds a lot of sentiment... and a lot of granddaughters and grandsons just remembering when times were more simple, and you remember stuff about your childhood and your now-departed relatives, so a lot of moments for people." Mark added: "We have had a blast! Thanks for all of the support we have had from our regulars, they will be missed."

On the Beach sees continued travel demand as summer bookings soar

On the Beach is forecasting another prosperous summer of travel in 2025, following a spike in early bookings. The London-listed travel company reported a 10% year-on-year increase in total transaction value (TTV), a metric for ticket sales, for the forthcoming summer season, as reported by City AM. Group TTV for holidays planned from March to June has also seen a 17% rise. According to current booking trends, this summer is set to outperform last year's significantly, although On the Beach maintains its full-year profit forecast, as stated in a market announcement. CEO Shaun Morton highlighted robust demand for city destinations such as Amsterdam, Paris, and Krakow, with package holidays to the Republic of Ireland also proving a hit. "The success of these early-stage strategic initiatives combined with the growth in our core beach proposition gives me the confidence that summer 2025 will be significantly ahead of summer 2024 and the group will deliver FY25 adjusted pre-tax profit in line with market expectations," added Morton. This comes on the heels of a record-breaking year for On the Beach, during which the Manchester-based firm capitalised on the soaring demand for European holidays. The company announced on Tuesday that it had completed 64% of a £25m share buyback scheme initiated in December. Shares saw an approximate 1% rise in early trading. In their note, Panmure Liberum analysts highlighted the success of On the Beach's "low-cost/no commitment" model in offsetting broader inflationary pressures.

Harvey Nichols to close Beauty Bazaar in Liverpool ONE

Liverpool ONE is set to lose one of its most prominent retailers as Harvey Nichols' Beauty Bazaar is scheduled to close its doors. The store, situated on Manesty's Lane in the city centre, has been in operation since 2012. The Liverpool Echo. reports that staff were informed of the impending closure on Tuesday. A Harvey Nichols spokesperson revealed that the company is focusing on "full category stores" as part of its growth strategy. They stated: "As we implement our strategy to reposition Harvey Nichols for growth, our emphasis is on full category stores within our estate. "We have reviewed our store portfolio and mutually agreed with the Landlord of our Beauty Bazaar location in Liverpool to surrender the lease as we focus on investment into full-category stores. "Unfortunately, this means that our employees in the Liverpool store may be at risk of redundancy. We have entered into a consultation process and are doing everything we can to support those affected by the surrender." A spokesperson from Liverpool ONE said: "Beauty Bazaar Harvey Nichols has made an important contribution to Liverpool ONE's success since opening in 2012. We're committed to bringing the best, in-demand brands to Liverpool ONE and we have well-progressed plans to transform the space that will ensure Liverpool ONE continues to go from the strength-to-strength. We look forward to sharing an update soon." The store is expected to close in mid-April. . The store was among the last to resume operations in Liverpool ONE after the nationwide closure of non-essential stores in March 2020. Unlike other retailers, such as Primark, Zara, and Sports Direct, which reopened in June, Harvey Nichols Beauty Bazaar opted for a phased reopening. Its locations in Knightsbridge, Leeds, Edinburgh, and Manchester reopened between June and August 2020, while the Liverpool store, which features a hair salon, spa, and bar, reopened on September 30, 2020. The three-story Harvey Nichols store in Liverpool ONE offered a range of products and treatments. At its launch in 2012, the store celebrated with a day of pampering, attended by local celebrities and American socialite Olivia Palermo, who cut the ribbon to officially open the store. The decision to open in Liverpool was based on research identifying the city as the UK's second-largest beauty market outside of London. Prior to the store's opening in 2012, Daniela Rinaldi, the retailer's then-group concession and beauty director, stated: "Girls in Liverpool have single-handedly held the banner for glamour. They are groomed within an inch of their lives. They live and breath beauty and this is a thank you to them. "Globally this will be the first time international and premium brands will be housed within such a luxurious environment. It has superseded everyone's expectations and the most used word in this store is 'wow' so it is perfectly in keeping with the name of our fabulous champagne and cocktail bar."

Goldie Lookin' Chain rapper launches new record shop venture

Rapper with the band Goldie Lookin’ Chain Graham Taylor has team up with novelist and presenter Gary Raymond to launch a new record shop business in Monmouth. With a mutual love for vinyl records the pair have opened Grinning Soul Records located at White Swan Court in the town. The new business has been supported with a micro loan from the Development Bank of Wales to part-fund the kit out of their shop and purchase stock. Having been close friends since their school days in Newport, Mr Taylor and BBC presenter and author Mr Raymond had a childhood ambition to open a record shop. Mr Raymond said: “Music fans come from all over the world to visit Monmouth as the home of Rockfield Studios, the legendary Welsh recording studios. Bohemian Rhapsody was recorded here yet there was no record shop in the town. Grinning Soul Records will give local people and visitors like the opportunity to buy traditional vinyl records that were made here in Monmouth. This is our childhood dream come true.” Donna Strohmeyer, investment executive with the Development Bank of Wales, said: “Gary and Graham are both passionate about music and have a great opportunity to capitalise on the booming vinyl industry and the international market created by Rockfield Studios. Indeed, Grinning Soul Records is already proving to be a popular hub for music lovers in the Monmouthshire area and beyond. It’s a great addition to the vibrant market town of Monmouth.”

Supermarkets see varied fortunes amid rising sales with Asda continuing to struggle

UK supermarket sales outpaced inflation in February as consumers sought budget-friendly indulgences. According to Kantar, take-home sales from grocers increased by 3.6 per cent in the four weeks leading up to 23 February, while prices saw a 3.3 per cent rise, as reported by City AM. However, this overall figure conceals a disparity among the UK's leading supermarkets. Asda witnessed a decline in sales, whereas Tesco and Sainsbury's managed to expand their market share. Grocery prices have been on an upward trajectory since August last year, but the growth rate is significantly lower than the double-digit figures observed during the cost-of-living crisis. Despite this, sales continue to lag behind inflation. Kantar reported that food inflation remained unchanged month-on-month. Prices are escalating most rapidly in sectors such as chocolate confectionery, juices and butters, while they're dropping fastest in cat and dog food, laundry and household paper products. Spending on deals experienced another surge in February, with purchases made on offers now representing 27.6 per cent of sales, a 0.3 percentage point increase compared to last year. Sally Ball, Kantar's head of retail, commented on the trend: "[One of the big headlines of the past few years has been consumers' hunt for value," She added, "You might think that people would shop around more to find the best deals but in fact, that's not the case. Households visited just under five different grocers this month, the lowest level in February since 2021. "The growth of supermarket loyalty schemes is partly behind this as shoppers use them to unlock exclusive discounts." Asda's sales continue to decline, with revenues totalling £4.6bn in the 12 weeks leading up to 23 February, marking a five per cent decrease year on year. The TDR-owned chain remains the only major grocery retailer to have lost market share over the past year. Asda has been tackling challenges such as competition from discounters Lidl and Aldi, substantial debt, strike actions, and costly separation from its former owner's IT infrastructure. Tesco has maintained its status as the UK's largest supermarket, capturing 28.3 per cent of the market with over £10bn in sales. Meanwhile, Sainsbury's also saw positive movement, nudging its market share from 15.5 per cent to 15.7 per cent compared to the same period last year. Morrisons now claims 8.6 per cent of the market share. Ocado experienced the fastest growth among retailers for the tenth month in a row, with spending surging by 9.6 per cent – holding steady with a 1.9 per cent market share. Aldi celebrated a market share of 10.3 per cent after enjoying a 4.9 per cent increase in sales – its most significant boost since January 2024.

High Street shops, pubs and restaurants face £1bn tax bill from April

Shops, restaurants and pubs across England are facing an extra £1 billion in taxes when a discount is cut next month, adding to a “tsunami” of rising costs hurtling toward the sector, according to new analysis. Businesses in London will be hit hardest by changes, tax and software firm Ryan found. Firms in the retail, leisure and hospitality sector are facing increased costs in April when a discount on business rates will be reduced from 75% to 40%. The changes were announced in last year’s autumn Budget, with the Government committing to keeping the discount scheme for the next financial year but cutting the level of relief. Each business will still have a maximum discount of £110,000. Ryan’s analysis found that the reduced discount will raise an extra £1.03 billion from firms across England over the 2025-2026 tax year. Nearly a third of the extra revenue will come from businesses in London, who collectively are facing an additional £309.7 million in business rates. This is followed by an extra £157.9 million from businesses in the South East who are facing a bigger bill, and £110.5 million from firms in the North West. Alex Probyn, a property tax expert at Ryan, told the PA news agency that it “comes on top of a tsunami of other rising costs, making it a complex and challenging environment” for businesses to operate in. From April, national insurance contributions will also rise for some businesses, while they will also have to pay employees a higher national living wage. The Government has said extra revenues raised from higher taxes on businesses will help fill a gap in the UK’s public finances and be plugged into things like infrastructure and the public sector. It pledged in the Budget to introduce permanently lower business rates for smaller retail, hospitality and leisure firms from 2026. The Government has also said that some 865,000 employers will not pay any national insurance in the year ahead because of the employment allowance rising from £5,000 to £10,500. But Mr Probyn said the changes will “disproportionately affect small and independent businesses across sectors already struggling”.

Poundland considering 'all options' as it struggles and shuts 13 stores

Poundland’s owner is mooting a possible sale of the UK discount retail chain as it struggles amid tough sales and before incoming budget measures that will send wage costs soaring. Poland-based Pepco said it was considering “all strategic options” to spin out the struggling 825-strong chain from the wider group as focus on its more profitable Pepco brand. It said Pepco makes the “vast majority” of group earnings and the group wants to “further build on that strong base ultimately as a single pan-European format”. The group said: “Poundland is a strong brand that serves millions of customers every week and had around 2 billion euros (£1.67 billion) in annual turnover in financial year 2024, but it is also operating in an increasingly challenging UK retail landscape that is only intensifying. “From April 2025, the UK Government’s additional tax changes announced in the budget will also add further pressure to Poundland’s cost base. “Therefore, the board is actively evaluating all strategic options to separate Poundland from Group during financial year 2025, including a potential sale.” In January, the parent firm of Poundland said it was taking “immediate measures” to turn around the performance of the chain after a sharp drop in sales. Pepco Group said the UK business, will increase the number of products it sells for £1 or less as part of efforts to get the chain “back on track”. In recent years, Poundland has expanded its range of products being sold at price points above £1 in an effort to take on rival retailers such as B&M. However, on Thursday, the retailer said: “We are refocusing on its long-time strengths, such as recently increasing the number of core items at £1 or below from 1,500 to almost 2,400 in all UK stores.” Pepco said that recent trading at Poundland stores was challenging as the UK retail environment became tougher towards the end of 2024. Poundland revenues slid by 9.3% for the three months to December 31, with like-for-like sales down 7.3%, as it witnessed weaker clothing sales. The group also confirmed that it closed 13 Poundland stores over the quarter, with only two new store openings. It stressed that Poundland will not increase its store numbers over the current financial year as it focuses on improving sales. Meanwhile, the wider Pepco Group saw overall revenues grow 8.4%, supported by the opening of new Pepco and Dealz stores. Stephan Borchert, chief executive officer of Pepco Group, said: “The group delivered a mixed performance in its first quarter, with a strong performance from both the Pepco and Dealz brands, partially offset by Poundland’s ongoing challenges. “Poundland saw like-for-likes fall, largely driven by continued underperformance in clothing and general merchandise following the transition to Pepco-source product.