M&S has a happy Christmas while others suffer

Marks and Spencer reported increased sales in the final quarter of last year. But for other retailers 'twas not the season to be jolly...

by Dave Waller
Last Updated: 06 Nov 2012
M&S posted like-for-like sales up 2.8% in the final quarter of 2010, with internet sales through its M&S Direct up a hefty 25%. And it sold a record-breaking £50m of food on 23 December – that’s a ton of turkey, especially given the grizzly levels of snow and ice hampering shoppers and endangering deliveries across the country.

Indeed, M&S concedes its own fortunes drifted a bit: it reckons December's bad weather reduced its sales of general merchandise, including clothing and homewares, by 3.5%. It also cost it around 1% of food sales. But business picked up as Christmas approached, coming like a glass of brandy for new CEO Marc Bolland, who’d landed Santa-like and impeccably-dressed in the M&S fireplace earlier in the year brandishing plans for a £1bn strategic overhaul.

While the rest of the country ground to a halt under pressure from a wee bit of cold, at least some of our retailers did a lot better than our airports: M&S’s news follows good figures from Morrisons and Waitrose, and House of Fraser said on Sunday that sales increased 8.5% during the festive period.

Elsewhere loss-making online retailer Ocado also soared in the snow like a child on a biscuit tin lid: its Christmas sales jumped 40% on the equivalent period the year before. Sales hit £12.3m in the Christmas week, and £50.9m for December as a whole. All of which will come as good news after its disappointing flotation last year. Having triumphed over the snow, it’s now simply got to overcome potentially crippling competition from the other major supermarkets’ home-delivery services. We'll see how Tesco has fared when its results come out on Thursday.

But while a few retailers will be feeling refreshed as we move deeper into January, others will still be suffering hangovers. The British Retail Consortium has published the first figures that bring together data from a wide range of retailers, and found that overall sales were down 0.3% on December 2009. While food did all right, like-for-like sales of non-food items fell by 0.8% in the final quarter of 2010 compared with a year ago. A year earlier they had risen by 3.8%.

Those left rubbing their heads include Mothercare, HMV and Clinton Cards, all of which have already issued profit warnings after struggling over Christmas. Next took a £22m hit because of the snow, and it caused £30m of lost sales at Debenhams.

The snow offers a pretty effective excuse. Thankfully the harsh conditions have thawed – for now. But we predict a prolonged period of high pressure, as cuts and a rise in VAT sweep in from Westminster.

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