Debenhams’ appetite for restaurant sales offsets weak retail demand

LONDON, ENGLAND - DECEMBER 26:  Shoppers walk outside Debenhams during the annual boxing day sales at Debenhams on December 26, 2014 in London, England.  (Photo by Ben A. Pruchnie/Getty Images)

Debenhams’ ongoing move to expand its restaurant offering appears to be paying dividends after it thanked food sales for helping to offset a decline in core clothing sales over the last three months.  

In a performance update for the 41 weeks to 17 June, the department store said the UK trading environment had been more volatile in the second half of its financial year, however its targeted destination categories of Beauty, Accessories and Food & Drink had mitigated the impact of a weaker clothing market.

With 13 new food offers in the period, food sales have risen 5%, it revealed.

Overall, the retailer said that group like‐for‐like sales were up almost 1% over the past 15 weeks and 1.8% over the last 41 weeks, its financial year to date.

Sergio Bucher, CEO of Debenhams, said: “We are making progress in implementing our exciting and ambitious new strategy, Debenhams Redesigned, which will make us the destination for Social Shopping. We have already started to deliver changes that will improve service for our customers and simplify and focus our operations.”

Debenhams first began trialling third party restaurant tie-ups two years ago as it looked to muscle in on demand for in-store food offerings from shoppers and make more profitable use of its floor space.

It initially began working with Patisserie Valerie and Chi Kitchen as part of a “space optimisation” strategy.

Debenhams chiefs pledged to monitor the response to both brands as it pursued a programme of broadening its retail offer. At the time of announcing the partnerships, it set out to fill more than 50% of the one million square feet of floor space it had earmarked for concessions by April 2016.

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