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UK Christmas Retail 2017: The Winners and the Losers
The weeks leading up to Christmas are traditionally a profitable time for retailers, both on the high street and online, but who were the winners and losers in the festive spending frenzy of 2017? Read on to find out which retailers enjoyed success in the run-up to Christmas and who failed to hit their target...
December 2017's total UK sales at the German discount chain, Aldi, were up 15% on the previous year. Their Christmas TV advertising campaign boosted sales of their festive vegetables and other foods, beverages such as Prosecco and premium products, including their mince pies and desserts. Aldi bosses say the company has taken trade from higher-priced, upmarket retailers such as Marks and Spencer and Waitrose.
Aldi's rival German retail store, Lidl, has also reported a substantial rise in sales of 10% in December 2017, compared with the same period in 2016. Lidl lured shoppers with new stores and a combination of bargain prices and luxury foods. A social media campaign boosted the sales of around 200,000 lobsters over the festive period, while Lidl also reduced the price of foods such as Christmas puddings, stollen and Serrano ham to further tempt people.
Fortnum and Mason
The rise in profits for discount supermarkets didn't stop the UK's luxury department stores from enjoying similar success. Fortnum and Mason has reported a sales growth of 16% for the five-week period up to 1st January 2018, with luxury items such as Christmas hampers, caviar, smoked salmon and truffles proving popular. The bakery department alone enjoyed a 23% growth and hamper sales increased by 19%.
Sports fashion retailer JD Sports reported profits were up by 10% in the five weeks up to 7th January, thanks to buoyant Christmas sales. It is said to have overtaken its rival (discount sports brand Sports Direct) in terms of market value. As a result, the retailer says it expects group profit before tax to reach £300 million, exceeding expectations for the year to 3rd February.
Marks and Spencer
The high street retailer enjoyed its most profitable Christmas in six years under new chief executive, Steve Rowe. The Christmas boost finally ended the retail giant's steady fall in the sales of its clothing. The fashion department's sales rose 2.3% in the 13-week period up to 31st December. In the same period in 2016, sales had fallen by 6%, so store bosses hope the tide has turned.
Morrisons had its best Christmas in seven years, attributed in part to revamping its premium range and opening more tills to ensure a smoother shopping experience. The supermarket has reported a 2.9% increase in like-for-like sales in the nine-week period up to 1st January 2018. Sales of Morrisons' own Nutmeg clothing range were up 30% on the previous year. Products that sold well included fresh fruit, vegetables, alcohol and Morrisons’ new "The Best" range.
The UK's biggest supermarket chain reported a rise in sales of 0.7% in the six weeks up to 7th January 2018. This was attributed in part to sales of toys, food and clothing over Christmas, a drive to improve customer service and more product ranges. The best sellers were party food (with sales up by 24%), wine sales (up by 20%) and sales of "Free From" specialist foods (up by 18%).
The UK's second largest supermarket enjoyed growth of 0.1% compared with the previous year. Although this was modest, it was still better than the 0.8% drop that analysts had forecast and was Sainsbury's first sales increase since March. Argos, bought by Sainsbury's last year for £1.4 billion, saw a 4% increase - more than double the forecast. Sales of groceries were up in supermarkets that contained Argos outlets.
The department store enjoyed better than expected Christmas sales, with beauty products and gifts boosting performance. Sales were up by 5% in the seven weeks up to 7th January 2018, compared with the same period 12 months ago. This was much better than the 1% drop predicted by analysts.
Discount clothes chain Primark is owned by Associated British Foods, who did not release figures specifically for Primark, although the company reported trading across all its businesses was “good” in the 16 weeks leading up to Christmas, with total sales up by 11% year on year.
Fellow discount retailer B&M enjoyed a sales rise of 12.9% in its UK market in the 13 weeks leading up to 23rd December 2017. Sales of Christmas decorations, groceries, gifts and confectionery were particularly high, according to the company, whose chairman is Terry Leahy, the former chief executive of Tesco.
Online fashion outlet Asos had a successful Christmas, with UK sales rising by 18% and international sales up by a massive 52% (partly due to the weakness of the pound) in the four months leading up to the end of December. The company is estimating sales for the full year will have risen by between 25% and 30%, thanks to the Christmas trading period's success.
The online electrical retailer saw total revenue rise by 12.3% in the three months up to 31st December, compared with the same period in 2016. Analysts say AO has gained a "significant market share" in a sector which has been declining throughout much of 2016. The electrical giant also has expansion plans.
Fashion and homewares retailer Next was one of the few losers over the Christmas period. Despite the chain having launched new stores, full-price sales dropped by 3.5% in the build-up to Christmas. Even the annual winter sale, which began on Boxing Day, couldn't lift sales and was down 7% on the previous year. Online directory sales rose by 5%.
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