Advertisement

Christmas shopping: the winners and losers

From BBC - January 11, 2018

Christmas is the most important trading period of the year for most retailers, which is why their performance over the festive season comes under such scrutiny.

This festive season, those with strong online operations and some supermarkets have fared well, while the names of the losers would sound familiar to somebody walking down a High Street in the 1980s.

Competition among retailers is intense, and adding to their problems is evidence that shoppers are reining in spending.

A survey by Visa, whose debit and credit cards are used for a third of payments in the UK, found consumer spending fell in 2017 - the first decline for five years.

So who are the winners and losers?

LOSERS

Marks & Spencer

The High Street giant reported falling sales over the final three months of the year.

Overall, sales were down 1.4%. Clothing dropped 2.8% while food sales were down 0.4%. The comparison could be said to be against a strong rise last year, but that itself was against a particularly weak 2015.

M&S says, however, that Christmas trading itself was not too bad and offset a weak clothing market in October, but it also referred to "continuing underperformance" in its food business.

House of Fraser

Few were expecting good news from the department store group after it revealed last week that it was seeking a cut in rents at its stores.

In the six weeks to 23 December, sales in stores fell by 2.9%, although Black Friday sales were up by 0.8%. Worse, online sales dropped by 7.5% over the six-week period.

However, House of Fraser said its strategy of discounting fewer products bumped up profit margins across the business by about 0.5% over the festive trading period.

Debenhams

The early release of a trading statement is seldom a sign of good news and so it proved for Debenhams.

The department store warned its full-year profits would be lower than expected as it struggled amid a"volatile and competitive" market.

Its statement, which came out nearly a week ahead of schedule, said UK like-for-like sales fell 2.6% in the 17 weeks to 30 December.

Debenhams did manage to increase sales over the six-week Christmas period, but that was only after it resorted to cutting prices, and it added that the first week of the post-Christmas sale went worse than expected.

Mothercare

Mothercare issued a profit warning as it reported a fall in sales both at its stores and online.

The baby goods retailer said it had decided not to cut prices ahead of Christmas "to protect our brand positioning", with the aim of then making big discounts in the end of season sale.

WINNERS

Next

Supermarkets

Boohoo

Advertisement

Continue reading at BBC »