The winners on the high street

Retailers’ traditional post-Christmas reporting season is in full swing. Fashion group Next was one of the big winners, with sales between 1 November and 24 December jumping by 12%. Online sales jumped by a fifth at John Lewis, where internet sales comprised a third of the total. House of Fraser also performed strongly, unlike Debenhams, which issued a profit warning.

In the supermarket sector, J Sainsbury’s strong Christmas allowed it to eke out marginal sales growth in the fourth quarter. The best-performing supermarkets were the premium and the discount chains. Aldi, Lidl and Waitrose have gained market share.

What the commentators said

The high-street retailers who made a success of the season, said Marketingweek.co.uk, “held their nerve” and refrained from heavy discounting before Christmas Day. H&M, M&S and French Connection, rattled by weak sales in November, offered discounts of up to 60%.

This is counterproductive, as customers used to discounts early in the season become reluctant to pay full price for anything, while a track record of pre-Christmas discounting “appears to have started to erode shoppers’ broader confidence” in a brand.

Having a strong online business was the other driver of healthy sales, said Graham Ruddick in The Sunday Telegraph. Next offered a free next-day delivery service to stores, so customers could order online the weekend before Christmas Day and collect it in time. As a result, internet sales did not fall off after a good start as they have in previous years.

John Lewis is also notable for its click-and-collect service. Sales of this kind rose by 60% year-on-year. The lessons, then, are simple, concluded Iain Dey in The Sunday Times. “Don’t cut prices too far and find a way to make the internet work” for customers. Keep that in mind in the next few weeks as the “endless excuses” start to come out of retailers’ mouths.

Merryn

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