One of the most interesting parts of every January is digesting the results from retailers over the festive period. While it only represents a small part of the calendar, it is the one time of year when all retailers are equally committed to driving sales and improving on the previous 12 months. As such, working out who the winners and losers are is always worthy of note. This year, with firms like John Lewis and House of Fraser succeeding while Debenhams, for example, slipped, there are a number of patterns that we can see emerging from what Christmas consumers in 2013 wanted out of their retail experience.
Perhaps unsurprisingly, it seems that shoppers largely plumped for the premium option, as is invariably the case with a special occasion such as Christmas. Higher-end department store group John Lewis revealed that like-for-likes lifted by 6.9% during the festive period, with premium grocer Booths also announcing sales growth. Commenting on the results, Booths chairman Edwin Booth tellingly said: “Customers care about quality and provenance at Christmas.” In comparison, results from companies like Tesco and Debenhams have underwhelmed, showing that the special occasion leads customers to push their buying choices up a price range.
Online was once again another crucial factor to businesses’ performances. According to the Financial Times, online sales hit an all-time high this Christmas, registering as much as 20% of all retailing over the period. It appears that the sophistication of a company’s ecommerce operation is borne out in its end performance. House of Fraser saw stellar online growth of 57.7%, for example, and has impressed overall. Next, which also boasts a good online function, has raised profit expectations to between £684m and £700m as a result of its good festive showing. This also applies to more niche businesses, with analysts expecting great things from fashion e-tailer ASOS, which reports its first-quarter figures later this month.
One more surprising trend that emerged over Christmas was consumers’ reluctance to go for firms offering big discounts and special pre-Christmas offers. Among the winners here was Asda, which stuck to a policy of “gimmick-free, simple every-day low price transparency” over the festive season. Also high-flying were Theo Paphitis’s Ryman, Robert Dyas and Boux Avenue businesses, which, according to the group, “avoided the need for the discounting seen from some other retailers” as all three arms grew sales around Christmas-time.
It is not hard to imagine that at Christmas, before the start of the traditional New Year sales, the public could well be put off by companies plugging heavily-reduced items, particularly when it comes to gifting. It looks as though the strategy of sticking to regular, honest prices paid off this year.
Of course, there are anomalies to most patterns, and this is best expressed in the strong showing from discount bookseller The Works, which is celebrating like-for-like rises of 9.5% for the 10 weeks to January 5th. The Works isn’t a company you might have expected to do so well considering the fierce online competition in the books market and the preference for premium choices over Christmas; however, as CEO Kevin Keaney said, “Our sales growth shows there is a place on the high street for a family-friendly retailer.” The Works seems to have tapped into another crucial aspect for the modern Christmas retailer – providing an experience that simultaneously captures the imagination of many different demographics.
There’s a great deal of information provided post-Christmas for us to read into; what we can see is that despite patterns that may emerge, there is never a failsafe recipe to success during the festive season! Who else do you think has had a strong Christmas period? Let me know at moira@thembsgroup.co.uk, and have a wonderful weekend!