Sales seem to start earlier and earlier each year – and the discounting this festive season was as competitive as ever.
As Brexit weighs heavy on consumer confidence, rising inflation – currently at 3.1% – has also eaten into spending power.
Added to stagnating wages, the UK retail sector, from food to clothing, electronics to toys, faced a hard slog to deliver good results.
So who did raise a celebratory glass to the new year? And which retailers were left with unwanted presents still lying under their trees?
Tesco – it cemented its position as the UK’s favourite supermarket with sales up 2.3% in the 19 weeks to 6 January. The supermarket said it enjoyed “record sales and volumes” in the four weeks leading up to Christmas Day.
Boohoo – the urban fashion brand reported record revenue for the four months that include the Christmas period, and Black Friday. Revenue doubled to £228.2m. Not bad for a company founded just 12 years ago. Its brands include Nasty Gal and PrettyLittleThing.
John Lewis – as well known for its Christmas TV ads as anything it sells, sales at the John Lewis department stores were just over £1bn, up 3.1% on a like-for-like basis. It also enjoyed its most successful Black Friday, contributing to the biggest ever week of sales, up 7.2% year-on-year. A word of caution, though – boss Sir Charlie Mayfield says the weak pound and keeping pace with rivals’ discounts could hit profits later.
Waitrose – part of the John Lewis family, it prospered while Marks & Spencer struggled. Total Waitrose sales – excluding fuel – came in a £928m, a rise of 1.5% on last year.
Morrisons – UK’s fourth largest supermarket, shifted 2.8% more in the 10 weeks to 7 January than it did for the same period a year earlier, not including new store openings. Christmas trading was particularly strong with sales for the last six weeks up 3.7% compared to a year ago.
Next – the clothing retailer revealed a better than expected Christmas, with strong online sales more than offsetting poor trading at its high street stores. Overall sales rose 1.5% in the nine weeks to 24 December.
Sainsbury’s – the UK’s second-largest supermarket was boosted by its merger with Argos, upgrading profit expectations by about 5%. Sales at established stores rose by 1.1% in the 15 weeks to 6 January.
Fat Face – the trendy casual clothing retailer revealed a 12% increase in total sales in the five weeks to January. Its decision not to go down the pre-Christmas discounting route was crucial to its success, it said.
Marks & Spencer – its woes continue with clothing and homeware sales down 2.8%, while food, so often seen as its most successful sector, was down 0.4%. Neil Wilson, senior market analysts, at ETX Capital, said: “This isn’t just any retail decline, this is an M&S one. Waitrose – probably its closest apples-to-apples rival in food – saw like-for like sales up by 1.5%.”
House of Fraser – just days after seeking a rent reduction from its landlords, the retailer said sales in stores fell 2.9% in the six weeks to 23 December. Online sales fell 7.5% over the same period. However, it said its strategy of discounting fewer products paid off, with profit margins across the business up by approximately 0.5% over the festive trading period.
Card Factory – while sales for the 11 months to December 31 grew 5.9% year on year, sales of its core greetings cards were practically flat. Shares fell by about 20% in morning trading after it predicted profits would be about £95m, below the £98.5m in 2017.
Debenhams – brought forward its trading statement to issue a profits warning after seeing sales slump 2.6% in the 17 weeks to 30 December. Heavy discounting on festive gifts failed to draw in customers.
Mothercare – a dire Christmas for the mother and baby chain saw in-stores sales plummet 7.2% in the 12 weeks to December 30, while online sales tumbled 6.9%. A decision not to cut prices over the festive season did not pay off.