Analysts are expecting pressure to remain on UK Retail Sales which are published tomorrow, with monthly growth contracting by -0.5% (from 0.8% in Feb) on account of severely cold weather and snow (BRC – Springboard Footfall and Vacancies Monitor suggested March footfall -6%, steepest year-on-year fall since end-2010) despite annual growth accelerating to 2.0% (from 1.5% in February) thanks to a favourable early Easter.
The latest bad news for the UK Retail sector comes today from property group Hammerson (recently targeted by French outfit Klépierre) abandoning its takeover of peer INTU Properties, a deal which had been on hold due to aforementioned French interference.
The reason? Yes, you guessed it, a troubled UK retail sector, or “current market dynamics in the UK” to employ corporate guff.
As HMSO points out, the market perception of UK retail property has deteriorated markedly following the raft of companies (retail, food) falling into administration, bankruptcy or required CVAs. Furthermore, consumer confidence remained subdued, likely until the wage/inflation squeeze abates, and Brexit uncertainty eases further.
Today’s decision by Hammerson not to walk further INTU the proposed takeover is hardly a vote of confidence in the sector. Hammerson shareholders are clearly welcoming news of the company taking on less risk. INTU shareholders are evidently disappointed that a deal is now off the table.