The Christmas trading results have been coming in thick and fast, revealing a varied mix of success stories and those who ‘could do better.’
John Lewis & Partners
Starting the year on a high was John Lewis & Partners, which reported gross sales of £1,160m, up 2.5% on 2017, and up 1.0% on a like-for-like basis. The company was pleased to announce it had outperformed the market (according to the BRC) by 2.0%. They achieved this partially due to Black Friday, its biggest sales week in the retailer’s history, a very strong week running into Christmas including a record Christmas Eve in shops as customers took advantage of the full shopping weekend, and an encouraging first week of Clearance.
However, the bigger picture is less optimistic. Sir Charlie Mayfield, chairman of the John Lewis Partnership, commented: “We continue to expect full year total Partnership profits to be substantially lower this year, driven by slower sales growth over the year and margin pressure in John Lewis & Partners along with higher costs, mainly as a result of our continued investment in our IT capability.
“The actions taken in recent years to prepare for the current pressures in retail mean that the Partnership has the financial strength and flexibility to pay a modest bonus this year, without impacting our ambitious investment programme. However, the Board will need to consider carefully in March, following the usual process, whether payment of a bonus is prudent in the light of business and economic prospects at that time.”
Demonstrating that the craft sector is as hot as ever, Hobbycraft reported strong Christmas sales, with like-for-like sales up by 9.5% in the six weeks to 24 December. Both online and instore channels delivered, with physical store LFL sales up 7.1% and online by 28%.
This was partly achieved by boosting customer engagement via a series of workshops and demonstrations in the 12 week run-up to Christmas. This ranged from events about fillable baubles to personalised advent calendars. Hobbycraft reported the events were attended by more than 21,000 adults and children.
Sales of personalised and customisable gifts and decorations played a significant role. Visitors to its online blog and Christmas ‘Look book’ rose 10%, with the most hits for blog posts on crocheting a mini stocking advent calendar, 15 crafty Christmas hamper ideas and 14 Christmas Eve Box ideas.
Katherine Paterson, customer director at Hobbycraft, added: “A personalised present means so much more and Christmas is clearly the perfect time of year to create something extra special for loved ones. Social media channels and influencers are helping to drive this trend and our results this Christmas show that crafting a thoughtful gift or decoration is a more enriching experience in these challenging times.”
As if we needed to see further evidence of the current challenging conditions for retailers, the UK’s leading greetings card retailer Card Factory issued a disappointing trading statement on January 10. Despite a robust set of results, largely flat sales meant the company’s share price dropped 10%.
Card Factory admitted it had suffered from lower high street footfall over the Christmas period. CEO Karen Hubbard commented: “Across the estate, Christmas trading remained robust, with like-for-like sales down -0.5% for the YTD.
“Sales from cardfactory.co.uk continued to grow strongly, up 59.1% YTD. The combination of store and online sales, delivered overall Card Factory YTD LFL sales down -0.1%.”
“The Group delivered creditable revenue growth in the festive period, driven primarily by our new store rollout, with LFL trading reflecting the continuing weakness in consumer demand experienced across the retail sector in the run-up to Christmas,” she concluded.