The Christmas trading period is crucial for the retail sector as it makes up a large proportion of revenue for the year. The City also holds CEO’s to account on performance and so looking at trading results gives a good indication of how well a retailer is performing.
Total supermarket sales growth was marginal, up 0.2% in the 12 weeks to 29th December 2019, despite deep price cuts across all retailers. In value terms, this equates to a record £29.3 billion through the supermarket tills, which was £50 million up on Christmas 2018. Monday 23rd December was the busiest shopping day, breaking record sales totalling £798 million. But this has been the slowest rate of growth over the Christmas period since 2015.
Many shoppers seem to have cut back on some of the key Christmas traditions this year, with Christmas puddings sales falling 16% and seasonal biscuits down 11%. Turkey sales were down 1% as shoppers looked for smaller and cheaper joints such as crowns, moving away from the traditional large whole birds. We saw the same behaviour in Christmas 2018.
We will be analysing each retailer’s financial results as they are released over the coming weeks. Check back to see how each has done this Christmas.
Reference: Kantar Worldpanel
Sainsbury’s retail sales in decline but grocery sales perform well
Sainsbury’s have posted lower sales over its Christmas period, with like for like retail sales (excluding fuel) falling by 1.1%.
Grocery sales were solid with sales rising by 0.4% in the 15 weeks ending the 5th January. Sainsbury’s focused on value for money, with £9 turkey crowns and 30p vegetables proving popular.
Groceries online continues to perform well with online grocery sales increasing by 7.3% in the period. Convenience also grew by 3%.
Argos had a difficult period with a decline in general merchandise sales of 2.3% and there was a decline in clothing sales by 0.2%.
According to Kantar Worldpanel market share is 16% and down 0.1% on the previous year.
Morrison’s retail sales decline over the Christmas period
Challenging trading conditions and customer uncertainty have resulted in a 1.7% decline for Morrisons in like for like retail sales over the Christmas period (22 weeks ending the 5th January).
The performance of Morrisons wholesale business was impacted by lower total sales of McColls and this in turn impacted the overall like for like sales.
During the Christmas period Morrison’s focussed on its priorities, customers and managed costs to offset some of the impact on like for like sales. Their basket of Christmas items was very competitively priced with most prices the same as or lower than last year.
Morrison’s reported good brand growth in their Free From range, with sales up 34% over Christmas and New Year period.
Morrison’s market share is 10.3% which is down three percentage points when we compare this to the same period last year when market share was 10.6% (Kantar Worldpanel).
Positive performance from Tesco in 'Subdued market'
Despite Tesco achieving the biggest ever day of UK food sales in their history and outperformed the market in both in terms of volume and value terms, the business has still seen a 0.2% decline in sales 19 weeks to 4 January 2020.
When compared to Sainsbury’s and Morrison’s Tesco appears to be the ‘winner’ of the big 4 retailers and in a ‘subdued market’ the business is seen to have performed well.
This positive performance has largely been put down to the wholesale business owned by Tesco Booker which saw like for like sales increase 2.3 per cent over the Christmas period. In addition Tesco have sighted they have seen strong sales in fresh food and plant based products.
Tesco have invested significantly in keeping prices low for customers with a basket of 21 festive products being £2.28 cheaper than in 2018.
This is the last Christmas at the retailer for CEO Dave Lewis – who plans to exit the business in the summer of 2020.
M&S transformational strategy sees positive grocery results, but more work to do
M&S reported total like for like revenue growth, up 0.2% to £2.8 billion in the 13 weeks to 28th December, with grocery revenue up 1.4% to £1.7bn. International sales however have fallen by 2.3% to £251 million, as well as clothing and home division sales falling by 2.7% to £1.1 billion.
M&S have been implementing a turnaround strategy, as it struggled to sustain the clothing and homeware side of business. Chief Exec Steve Rowe said the results this Christmas reflected the ongoing progress to transform the business. An increase in volume in the food business and a strong two week Christmas period is evidence shoppers are responding to “sharper value and more relevant innovation” in store.
In a fierce competitive market, the increase in M&S grocery revenue is a positive signal meaning the turnaround strategy is working. It also demonstrates that shoppers are willing to spend a little more at Christmas if they see value for money.
It’s clear that M&S are still on that turnaround journey, as challenges such as “waste in the food business and the performance of its gift range” held the business back from delivering a stronger result.
John Lewis Partnership sales decline over Christmas but Waitrose performs well
John Lewis Partnership have posted lower sales over the Christmas period with like for like retail sales down 1.8%.
Waitrose and partners have reported that grocery sales are up 0.4% on a like for like basis but gross sales (excluding fuel) are down 1.3% versus last year due to shop closures. Waitrose sold twelve supermarkets over 2019, due to long term un-profitability, with 3 supermarkets going to Lidl.
Waitrose online performed well as sales increased by 16.7% and in the seven days to Christmas online grocery orders were up 23.4% and basket sizes were significantly larger.
John Lewis and Partners struggled with sales of home and technology goods which resulted in a 2.0% decline in sales.
Sir Charlie Mayfield, Chairman of the John Lewis Partnership, said: "We expect full year profits in Waitrose and Partners to be broadly in line with last year, but business profits will be significantly lower than last year due to losses from John Lewis and Partners".
Co-op's chilled products increase growth and market share
Co-op's 3.0% growth was ahead of the market, and enough to increase its share by 0.2 percentage points to 6.1%. Much of its success was fuelled by chilled products, with fresh poultry sales up by 10% and convenience items like pizza up 9%.