tiptrot.com June 22, 2018

Record Christmas for Tesco's online grocery business

13 January 2018, 12:58 | Cedric Leonard

GETTY BAD TIMES M&S's Christmas results come amid its store closures

M&S store

Online sales at M&S.com lifted 3%, while its ongoing move to pull out of global markets saw overseas sales slump 9.8%.

General merchandise comparable sales fell 0.6%.

Tesco, whose CEO is Dave Lewis, is the latest United Kingdom retailer to reveal its Christmas trading performance, which has been a mixed bag of results.

Tesco's UK LFL sales growth of 1.9% was driven by a 3.4% rise in food.

According to its latest trading update, third quarter like-for-like sales in the United Kingdom grew by 2.3 per cent - representing Tesco's eighth consecutive quarter of growth - and total sales grew 2.5 per cent.

Tesco did take a hit from lost tobacco sales after wholesaler Palmer & Harvey collapsed in November.

Shares fell more than 2% after its update.

James Grzinic, analyst at Jefferies, said: "Tesco's update confirmed a solid third quarter and Christmas, but not quite the dominant display expected by some". Morrisons and Co-op were notable performers.

It said own brand food ranges had performed strongly but general merchandise sales dragged like-for-like sales down by 0.6 percentage points over the Christmas period.

German chain Lidl claimed this week that it was the "fastest growing supermarket" over Christmas after booking record festive sales. Fellow German chain Aldi also notched up a double-digit rise, helping it rake in over £10 billion in turnover past year for the first time as festive shoppers snapped up luxury products and cut-price vegetables.

In its financial third quarter, M&S reported a 0.1% fall in total group sales to £3.167bn.

Once a British institution, M&S is facing fierce competition online and on the high street, with its efforts to revitalise its 134-year-old business hampered by a squeeze on consumer spending as inflation rises in Britain and wage growth falters.

M&S chief executive Steve Rowe said it had seen revenue grow both in-store and online in the weeks leading up to Christmas while it maintained its full-price stance in a "very promotional market" and did not participate in the Black Friday discount day.

It was another mixed bag for Marks & Spencer this Christmas with sales falling in its food and clothing and home divisions, though not by as much as the market had feared. Its food sales also fell on a like-for-like basis.

As ever, the all-important Christmas trading has brought a mixed bag of fortunes for retailers.

Recruitment firm Hays climbed nearly 3 percent on posting double-digit growth in Q2 net fees. It saw United Kingdom like-for-like sales tumble 2.6% in the 17 weeks to December 30, although "tactical promotional action" helped group sales improve over the six-week Christmas period, rising by 1.2% on a like-for-like basis.

The UK retail market faced a tough festive period as companies faced intense competition to win sales despite tightening consumer spending.

Group sales - which include the company's operations overseas - could only muster growth of 0.6% over the 19 weeks though, with an 11.1% decline in its Asia business as it ceases "unprofitable bulk selling activities" in Thailand.

But there was also plenty of cheer, with sales leaping at Ted Baker, upmarket fashion brand Joules and FatFace. Earlier this week, industry data had indicated that Tesco had been the best performing of the major supermarkets in the run-up to Christmas.

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