Supermarkets must close one in five stores

Analysts at Goldman Sachs have warned that Britain’s biggest supermarket groups must close one in five shops to turn around their performance. In a report on the grocery industry, Goldman said the retailers had to close stores in order to reduce their cost base. Analysts said this would then allow them to compete with Lidl and Aldi, and grow profits. “Our analysis of the UK grocery industry suggests capacity exit is the only viable solution for a return to profitable growth,” Goldman said, adding that store estates needed to be reduced by around 20%. The analysts said that if current trends continue then sales in large out-of-town supermarkets will fall by 3% every year until 2020. This would mean that sales in larger stores fall by 18% over the next six years. Separately, Chris Keen of CBRE said that grocery retailers had added 3.2m sq. ft. of space last year but were likely to reduce this to 2m sq. ft. next year. He said that supermarkets were allocating more space to non-food activities. "We'll see more space given up to concessions, to sublets, to things like gyms. Supermarkets will have more of a department store feel."

Self-build home applications tumble

Construction data has shown that the number of self-build home applications have declined over the past four years, with a total of 16,792 applications submitted in the first three quarters of 2008, compared to 12,159 over the same span this year. In Wales, applications are down 62%, while in the Midlands and East Anglia they have fallen 35%. The Independent i, Page: 46, 47 The Independent, Page: 43

RICS: Market is in Mexican standoff

RICS has claimed that the UK’s real estate market became trapped in a “Mexican standoff” during October, as buyer demand fell for the sixth consecutive month, the longest streak of falling demand seen by RICS members since 2008. Across the UK, a net balance of -18 was recorded in its residential Market Survey, however, in some areas this fluctuated significantly. In London, 62% of property agents reported a reduction in buyer interest over the month – far above the national average. Just 41% of homes listed on the market in London were sold in October, while the level of available stock increased. The body’s house price balance fell to +20, from +30 in September. The drop was driven by a fall in London to -35, down from September’s -9. Anthony Codling, property analyst at Jeffries, says that there is a significant gap between price expectations and what buyers are willing to pay, a gap “which needs to close”. The trend was not observed in Scotland

How art influences house sales

A new report has suggested that houses with prints of Mark Rothko art on the walls are likely to sell quicker than those without. On the other hand, homes with overly-familiar prints of work by Monet, or similarly well-known artists, are likely to take longer to find a buyer. The Standard speaks to estate agents and interior designers who have conducted research on art’s effect on the speed of house sales, breaking down schools of expression as well as individual artists’ influence on the process. Evening Standard, Page: 23

Smells like home

Barratt Homes is trialling a perfumed reed diffuser which dispenses the smell of a home-cooked roast dinner at one of its Wakefield show homes. Research conducted by the company found that one in six adults prize the right smell in a property as making it feel like home, with roast-dinner the favourite, followed by coffee and warm cookies.

Britain most prosperous large economy in EU

The Legatum Institute's 2014 Prosperity Index has found that Britain is the most prosperous of the large economies in the European Union, but still lags behind countries such as Switzerland and Norway which chose not to join the bloc. The Index found that Norway was the most prosperous country in the world, with Switzerland at number two in the list. Britain is ranked at number 13, three places higher than last year's index, and one spot ahead of Germany. However, Britain was outranked by Ireland, Denmark and the Netherlands, as well as New Zealand, which came third. The United States came tenth.