Retailers reveal Christmas crunch: The numbers were bad (except Tesco's)
Sales took a tumble at M&S and Debenhams and John Lewis may not pay a bonus for the first time since 1953. But Tesco held up, as BRC reveals only food, toys and computers enjoyed rising sales across the sector
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Your support makes all the difference.Just like that the retail apocalypse has returned. Debenhams, M&S, and John Lewis had news ranging from the chilly to the goodness me get out the ultra warm super thermals its an arctic winter out there.
With everyone going at the same time, the pain of the media singing the famous football chant - you’re (insert four letter word) and you know you are - was at least shared.
The Brtitish Retail Consortium helped out there with industry wide figures and a declaration that 2018 was “the worst Christmas for retail since 2008”.
It hardly bears repeating that that was the year of the financial crisis. A horrible recession followed hot on its heels. So if you're inclined to run and hide under the covers no one would blame you.
But there were some bright spots. The BRC figures showed sales of food, toys and computers were up, which helps to explain, the decent overall performance put in by the supermarkets. Among them, Aldi did great, Morrisons was ok, Sainsbury’s no worse than feared. Tesco, the latest to go, confirmed the trend. It reported core UK sales up 2.2 per cent over Christmas. The beast is well and truly back.
The consumer seems to have decided to spend on food and gifts for the kids, while reigning in on everyone and everything else.
Such belt tightening, coming after years of negative inflation adjusted wage growth, is no bad thing. Borrowing or dipping into the savings, which is what people have been doing over the past few years, is unsustainable long term. The decision by many Britons to conserve resources is particularly wise at a time when the Conservative Government of Theresa May seems hell bent on kicking the country in the teeth.
But you have to pity the people on the sharp end. Debs is in the worst state. There is a big question mark over the long term future of the department store as a concept, but the rapidity of the decline at this one tells you it’s got it badly wrong.
Sales fell by 5.7 per cent over the 18 weeks to January 5. Chief executive Sergio Bucher somehow managed to confirm his profit guidance, but the ongoing conversations about refinancing he’s having to hold with lenders can’t be easy. Would you be keen to lend to this business?
The decline in sales at M&S - 2.2 per cent - was par for the course for this one time high street bellwether that has been scratching its corporate head about how to get things moving for years now.
Compared to those two the John Lewis Partnership is basking in the sunlit uplands. Even with distressed rivals throwing cheap stock out of their doors before closing them, it managed to report a 1 per cent rise in sales at stores open at least year.
That might not look like anything to write home about, but there are plenty of retail bosses that would dive into a pool full of hungry crocodiles if it meant they could get even close to that.
Profits will be down this year, but they will still be decent enough. The only fly in the ointment was the warning that employee partners may not get a bonus for the first time since 1953.
The final decision on that is made in March, which is significant because that’s the month when Brexit is supposed to happen.
John Lewis is almost certain to be among the last retailers standing when the current violent sector wide earthquake has passed. That will be the case even if the UK’s rotten Government is allowed to press ahead with a disastrous no deal Brexit.
But if the mad Brexiteers do get their way, it makes sense for the business to keep hold of its cash so those partners keep their jobs.
They’ll know who to blame for the absence of their annual bonuses and it won’t be their bosses.
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