Slow Christmas for retailers

The retail sector had an “underwhelming” festive season, said the British Retail Consortium. In December sales rose by 1.5% year-on-year. On a like-for-like basis, they gained just 0.3%. The internet saved the season: non-food sales rocketed by almost 18%, thus ensuring that overall revenue was up on last year.

Among supermarkets, Wm Morrison was the big loser. Department stores were winners: House of Fraser, Debenhams and John Lewis notched up record holiday sales, with the latter’s expanding by 13%. New Look and Next also did well.

What the commentators said

One theme to emerge from the results is the ongoing squeeze on consumers as inflation remains high and earnings growth low. Normally, discount supermarkets’ performance dips at Christmas, noted Edward Garner of Kantar Worldpanel, but Aldi’s record market share of 3.2% “is a sign of the times and shows that this is no longer the case”. Of course, it helped that Aldi carried fine wines this year.

J Sainsbury said that sales of its own-label goods rose three times faster than branded goods during the quarter to 7 January. Debenhams, noting that Christmas trading was “the toughest in 40 years”, had to discount to get shoppers through the door.

Meanwhile, the retailers that did best over Christmas “are among those considered to have the best online presence”, as Claire Jones pointed out in the Financial Times. Internet shopping seems to have come of age.

Retailers have made their websites more accessible through smartphones and tablets, and confidence in online security has improved. New delivery options such as ‘click-and-collect’, whereby goods ordered online can be picked up from the store in the high street or even other collection points that have an arrangement with the retailer, such as a nearby convenience store.

Internet shoppers, said Harry Wallop in The Daily Telegraph, “are finally getting the sort of service and convenience they were promised”.

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