Eyes turn to SuperGroup for a read on fashion retail trends, while Greggs benefits from the increasing ‘food on the go’ trend.
Fashion specialist SuperGroup updates on Thursday, providing another opportunity to take the temperature on apparel retail.
SuperGroup’s performance is likely to be scrutinised even more closely than usual.
Many clothing retailers have been battered by unseasonable weather, but it is unclear the extent to which that is the reason, rather than company-specific concerns or wider changes to shopping habits, for the sector to be having such a hard time.
Bellwether Next, for instance, last week cited parky weather in March and April as having cooled demand.
But Next also said its performance might be “indicative of weaker underlying demand for clothing”.
The retailer had already flagged the possibility that people were choosing to spend on activities such as going out or holidays, rather than on retail categories such as clothing.
Next also raised the possibility that “a wider slowdown in consumer spending” was in progress.
However, over at Sainsbury’s, which posted prelims last week, clothing was a star performer.
Clothing sales climbed by a market-beating 8.5% at JS. That, of course, was not over a comparable period to Next, but the grocers are perhaps taking a bite out of established fashion players’ sales.
Sainsbury’s Tu brand, for instance is now the UK’s sixth largest by volume and 10th biggest by value.
So it will be fascinating to hear what SuperGroup has to say about the market.
Incidentally, broker Canaccord Genuity thinks SuperGroup is likely to have been insulated from any weather impact because of the number of “continuity ranges” it sells all year round.
That surely must be the sort of fashion trend that other retailers should also adopt to the maximum extent that they can.
Battle of the sausage rolls – and salads
Greggs, famous for its sausage rolls but now a place where you can choose from a more extensive menu, such as soups and salads, updates on trading today.
While businesses such as Greggs always competed with supermarkets to some degree, the lines between the two are increasingly blurred as the ‘food on the go’ trend becomes ever more pronounced.
That was evident in Morrisons’ update last week.
While the grocer’s like-for-likes were up only 0.7% – very welcome, though small, as evidence that a turnaround is succeeding – food-to-go sales leaped by 17%.
As in-store dining options grow, such as Waitrose’s charcuterie platters in the wine department and juice bars, the grocers and eateries such as Greggs, Pret a Manger and Pod are increasingly fighting for the same food pound.
Maybe Tesco’s acquisition of Harris + Hoole and Giraffe, while distractions when the core business was failing, make more sense than they appeared to when the deals were done.