ATCM Annual Conference 2009

Retail – where it is and where it’s going

Jane MilneDirector of Business Environment

British Retail Consortium

Retail sales and consumer confidence

House price and mortgage approvals

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Jan-07Feb-07Mar-07Apr-07May-07Jun-07Jul-07Aug-07Sep-07Oct-07Nov-07Dec-07Jan-08Feb-08Mar-08Apr-08May-08Jun-08Jul-08Aug-08Sep-08Oct-08Nov-08Dec-08

House price (% change yoy)

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Mortgage approval (% change yoy)

Halifax house prices index Mortgage approvals

Selected Profit Statements

Company Name Like -for-like sales Total Sales Food: Tesco 2.0% 5.9% Sainsbury's 4.5% 5.3% Marks and Spencer -7.1% -3.4% Fashion : Next -7.0% -3.0% JD Sports Fashion 2.8% Debenhams -3.5% 0.6% Mothercare 1.1% 1.8%

Selected Profit StatementsCompany Name Like -for-like sales Total Sales Electrical/Leisure : Argos -7.5% -3.6% DSG International -12.0% -8.0% Jessops 3.1% Kesa (Comet) -5.5% -2.2 HMV 3.0% 5.8% Game Group 11.9% 25.1% Home: Carpetright -13.0% -11.0% Homebase -10.2% -3.8% Other Clinton Cards -4.1% Halfords -7.8% -5.8%

Falling value of Sterling

1

1.2

1.4

1.6

1.8

2

2.2

Jan-05Apr-05Jul-05Oct-05Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09

Euro into Sterling US $ into Sterling

BRC-Nielsen Shop Price Index

Unemployment

Contraction in Lending

-3

-2

-1

0

1

2

3

4

5

6

7

Mar-04Jun-04Sep-04Dec-04Mar-05Jun-05Sep-05Dec-05Mar-06Jun-06Sep-06Dec-06Mar-07Jun-07Sep-07Dec-07Mar-08Jun-08Sep-08Dec-08

% growth

Centre for Cities

Closures on the High StreetFrom The Sunday Times

March 1, 2009

Stores tell landlords to get real

Retailers are forcing down rents as BritainÕs deepening recession leaves 90,000 shops empty

Closing down: in some town centres more than a quarter of the shops could be vacant by the end of this year

Cost drivers in retail

Which future?