NEWS EXTRA
Trading over the winter season has been described as the worst Christmas for retailers in a decade, however some businesses manage to push through despite the pessimism. DIY Week reports.
past year highlighted significant difficulties in trading for a large proportion of businesses on the high street, some are still managing to show positive growth amongst a general lack in consumer spending. BRC chief executtive Helen Dickinson said of the figures: “Squeezed consumers chose
not
to splash out this Christmas, with retail sales growth stalling for the first time in 28 months. The worst December sales performance in 10 years means a challenging start to 2019 for retailers, with business rates set to rise once again this year, and the threat of a No-Deal Brexit looming ever larger.” High street chain Robert Dyas saw a 1.1% like-for-like uplift in the six weeks to December 24 – the lowest growth of all of the brands in the Theo Paphitis Retail Group. The retailer’s trading update follows a year of positive trading for Dyas but profits took a hit from heavy investment in infrastructure and its digital offer.
Owner Theo Paphitis was happy with the performance in a difficult market. He said:
“I am pleased
that the group, as well as all of our individual brands, were able to record like-for-like sales growth during the Christmas trading period. The retail market remains an
A VERY MERRY CHRISTMAS? T
he beginning of 2019 has
seen a
host of retailers report on their Chrismas figures and, although the
extremely challenging one evidenced by several corporate failures over the last 12 months and is likely to be reflected in trading results across our sector.” With Robert Dyas seeing only
marginal growth, Mr Paphitis suggests the heavy discounting in the lead up to the peak Christmas period may have diluted sales for many retailers across the sector. “Black Friday has become a permanent fixture during peak trading and perhaps takes the edge away from the Christmas peak as we knew it,” he said.
UK variety goods value retailer, B&M saw group sales revenue grow in 12.1% during the quarter. B&M UK sales revenue in the 13-week period
HOW WERE RETAIL SALES OVER THE FESTIVE PERIOD?
11% 23% 17% 29% 10 DIY WEEK 14 JANUARY 2019 17%
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increased by 4.5% to £874.5million, although like-for-like revenues dipped 1.6% against a strong prior year of +3.9%. The business described “a pleasing
finish to the quarter”, with B&M UK like-for-like sales up 1.2% and like-for-like cash gross margin up 3.2% in December after “a difficult November period”. December’s positive trading momentum has continued into early trading in January for B&M and careful control of inventory has meant that stocks for the January 2019 end-of-season sale period are below the levels of last year, which should provide further support to the margin over Q4, the company has reported.
B&M has opened a net 20 new
stores in the quarter and the company has said it will continue to see attractive returns from the new store opening programme. It is now on track to open 56 gross new stores in FY19.
Chief executive Simon Arora said: “Despite the broader economic uncertainty over the last quarter, B&M is on track to deliver a record year for both sales and earnings, representing our fourteenth consecutive year of profit growth.”
Positive momentum Meanwhile, supermarket giant Tesco recorded a 0.7% uplift in like-for-like sales in its core UK business in Q3, representing the company’s twelfth consecutive quarter of growth. a more challenging market, Tesco
In
said it made significant further improvements to its customer offer. Over 74% of its 10,000 own-brand products had been relaunched by the end of the third quarter, with the roll-out of its ‘Exclusively at Tesco’ range 95% complete. As expected, Tesco said, and following a step-up in the marketing of ‘Exclusively at Tesco’, saw an increase in customer uptake.
Whilst this, and the initial
disruption, as it rolled out the new ranges, impacted the value of like- for-like sales, by the end of the third quarter overall UK sales volumes were outperforming the market. This positive momentum continued into the Christmas period where Tesco’s like-for-like sales grew by 2.2%, outperforming the market in both volume and value terms. Like-for-like sales in the Republic
of Ireland were flat over the 19-week period, against a strong performance last year. In a more competitive market, customers responded well to the Christmas offer with positive volumes across key fresh categories. Tesco plc chief executive Dave Lewis was positive and said: “As a team we have achieved a lot in the last 19 weeks. In the UK we delivered significant improvements in our competitive offer and this is reflected in a very strong Christmas performance which was ahead of the market. “We have more to do everywhere
but remain bang on track to deliver our plans for the year and...we are in a strong position.”
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