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

Investor optimism ebbs in Indian stockmarkets
Emerging markets

Investor optimism ebbs in Indian stockmarkets

India’s BSE Sensex stockmarket index has fallen by almost 8% so far this year. Interest rates are on the rise, and foreign investors have been selling…
18 May 2022
Aviva: a share for income investors to tuck away
Share tips

Aviva: a share for income investors to tuck away

Insurance giant Aviva is one of the highest yielding stocks in the FTSE 100 – and it’s cheap, too, making it a tempting target for income investors. R…
18 May 2022
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves looks at the FTSE 100’s top yielding stocks for income investors to consider.
18 May 2022
Three fast-growing, undervalued UK mid-cap stocks to buy now
Share tips

Three fast-growing, undervalued UK mid-cap stocks to buy now

Professional investor Katen Patel of the JPMorgan Mid Cap Investment Trust picks three fast-growing UK mid-cap stocks to buy now.
18 May 2022

Most Popular

Get set for another debt binge as real interest rates fall
UK Economy

Get set for another debt binge as real interest rates fall

Despite the fuss about rising interest rates, they’re falling in real terms. That will blow up a wild bubble, says Matthew Lynn.
15 May 2022
Is the oil market heading for a supply glut?
Oil

Is the oil market heading for a supply glut?

Many people assume that the high oil price is here to stay – and could well go higher. But we’ve been here before, says Max King. History suggests tha…
16 May 2022
Value is starting to emerge in the markets
Investment strategy

Value is starting to emerge in the markets

If you are looking for long-term value in the markets, some is beginning to emerge, says Merryn Somerset Webb. Indeed, you may soon be able to buy tra…
16 May 2022