Not such a Merry Christmas for supermarkets

The festive period provided no let up for the beleaguered supermarket sector.

Christmas retail trading figures began to arrive this week. Among the winners was House of Fraser: underlying sales were up 8% over the six weeks to 3 January, underpinned by 30% growth in online revenue.

Next grew sales by 3% in the two months to Christmas Eve, while John Lewis was another solid performer, with underlying sales up 4.8% in the five weeks to 27 December. Its food division Waitrose was a winner in the food segment.

However, J Sainsbury revealed the first dip in Christmas sales in a decade. A sales spike due to "Black Friday" was a key trend this year. A mid-December survey for the Confederation of British Industry showed the highest sales growth over the two prior weeks for 26 years.

What the commentators said

Waitrose is also benefiting from another major shift in shopping habits, said Chris Blackhurst in the Evening Standard. People are increasingly buying "a little and often rather than a lot and all at once" as they are tired of the hassle of traipsing round huge hypermarkets.

So Waitrose, with its emphasis on small metro stores, is cashing in. Sainsbury's and Tesco never saw this coming leaving them with a surplus of huge empty out-of-town locations. Their neglect of this trend "must rank as one of the mysteries of our age in business".

Meanwhile, Black Friday is becoming a problem for the entire sector, said James Moore in The Independent. Thanks to this discount day, an import from the US it is the day after Thanksgiving "it's not only a few hapless shoppers that got bruised".

Many people rushed to exploit the day's promotions and thus did their Christmas shopping in November. So "retailers ended up cannibalising their own sales". No wonder John Lewis's Andy Street now wants his rivals to reconsider whether it is such a good idea.

Recommended

How rising interest rates could hurt big tech stocks
Tech stocks

How rising interest rates could hurt big tech stocks

Low interest rates have helped the biggest companies to entrench their positions. But what if rates rise?
25 Oct 2021
Get healthy returns from these three healthcare stocks
Share tips

Get healthy returns from these three healthcare stocks

Professional investor Paul Major of the BB Healthcare Trust highlights three of his favourite healthcare stocks.
25 Oct 2021
Andrew Hunt: why it's a great time to be a deep value investor
Value investing

Andrew Hunt: why it's a great time to be a deep value investor

Merryn talks to Andrew Hunt, author of Better Value Investing, about his adventures in the market's dark underbelly, looking for the hated and neglec…
22 Oct 2021
Back on track: why you should invest in railways
Share tips

Back on track: why you should invest in railways

Rail transport suffered a severe blow in the pandemic. But while post-Covid-19 working patterns may reduce revenue, trends in technology, long-distanc…
22 Oct 2021

Most Popular

Properties for sale for around £1m
Houses for sale

Properties for sale for around £1m

From a stone-built farmhouse in the Snowdonia National Park, to a Victorian terraced house close to London’s Regent’s Canal, eight of the best propert…
15 Oct 2021
How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
Emerging markets: the Brics never lived up to their promise – but is now the time to buy?
Emerging markets

Emerging markets: the Brics never lived up to their promise – but is now the time to buy?

Twenty years ago hopes were high for Brazil, Russia, India and China – the “Brics” emerging-market economies. But only China has beaten expectations. …
18 Oct 2021