Government’s decision on VAT-free shopping scheme disappoints retailers
- Total supermarket sales growth in the UK slowed to 3.4% in April
- Ocado emerged as the fastest growing retailer with a 12% sales increase
- UK government’s decision not to reinstate VAT-free shopping scheme for international tourists
- Lounge Underwear’s pre-tax profits fell 33% despite a 6% sales increase
- Hugo Boss announced a 6% rise in sales for Q1 2024
- Pandora increased its revenue guidance to 8-10% after reporting 18% organic growth in Q1 2024
Total supermarket sales growth in the UK slowed to 3.4% in the four weeks ending April 20, down from the previous month’s 5.4%. This decline is attributed to easing inflation, an earlier Easter, and decreased general merchandise sales. Despite lower food inflation, food prices remained high compared to last year, with more consumers opting to dine at home. Ocado emerged as the fastest growing retailer with a 12% sales increase, followed by Sainsbury’s (6.6%) and Tesco (5.8%), while Aldi saw slower growth at 1.3% and Lidl experienced growth at 9.5%. Retail bosses expressed dismay over the UK government’s decision not to reinstate the VAT-free shopping scheme for international tourists, citing adverse impacts on the wider hospitality sector. Harrods’ managing director, Michael Ward, believes the scheme won’t return soon and suggested third-party providers manage a new tax refund program. The government previously explored reinstatement but was deterred by perceived costs. Lounge Underwear’s pre-tax profits fell 33% to £5.5m in the fiscal year ending June 2023, despite a 6% sales increase to £67.9m. The decline is attributed to the retailer’s focus on expanding its physical store presence, with four new stores opened during the period. CEO Daniel Marsden emphasised the brand’s omnichannel strategy and plans for international expansion, with a store set to open in Germany in June 2024. Hugo Boss announced a 6% rise in sales to €1.01bn for Q1 2024, with EBIT also up by 6% to €69m. Sales in the EMEA region grew by 5%, led by Germany and emerging markets, while the Americas saw an 11% increase, driven by the U.S. market. However, sales in China remained below last year’s levels due to subdued local demand. CEO Daniel Grieder expressed satisfaction with the company’s performance and emphasised their focus on executing growth strategies amid market volatility. Pandora increased its revenue guidance to 8-10% after reporting 18% organic growth in Q1 2024, with a record-high gross margin of 79.4%. The brand’s successful restaging and increased investments contributed to elevated brand desirability and revenue growth. Key European and U.S. markets experienced 9% LFL growth, with the rest of Pandora seeing an 18% increase. CEO Alexander Lacik highlighted the company’s market share gains and strategic initiatives fueling future growth. Trading in Q2 2024 remains healthy with high single-digit LFL growth.
Factuality Level: 8
Factuality Justification: The article provides a detailed overview of various companies’ sales performances and factors affecting the UK supermarket industry. The information presented is factual and supported by data, without any apparent bias or misleading information. The article maintains a focus on the main topic without unnecessary digressions or sensationalism.
Noise Level: 3
Noise Justification: The article provides detailed information on the supermarket sales growth in the UK, including key players and factors affecting the market. It also covers the impact of government decisions on the retail sector and specific company performances. The article stays on topic and supports its claims with data and examples. However, some information may be considered irrelevant or repetitive, such as the specific financial details of individual companies.
Financial Relevance: Yes
Financial Markets Impacted: Supermarket industry, retail industry
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the growth and performance of various supermarkets and retail companies, indicating financial relevance. However, there is no mention of any extreme events or their impacts.
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