View the article online at http://citywire.co.uk/wealth-manager/article/a726990
Blood on the high street as Tesco, Morrisons and M&S suffer weak Xmas
by James Phillipps on Jan 09, 2014 at 08:51
Marks and Spencer, Tesco and Wm Morrison have all reported weaker than expected Christmas trading highlighting the difficult conditions for the UK’s biggest retailers.
In a stock market update, Wm Morrison said like-for-like sales slumped by 5.6% over the key six week period to January 5, prompting the supermarket chain to warn that its annual profits will be at the bottom end of the forecast range.
Wm Morrison’s chief executive Dalton Philips had previously forecast an upturn in sales over the Christmas period, which would have turned round a disappointing year for the group, which continues to lose market share.
Meanwhile Tesco reported a 2.4% fall in like-for-like sales, worse than the expected 2% drop, prompting fresh concerns about customers moving away from the big supermarket chains in favour of cheaper shops, such as Aldi and Lidl.
Mark and Spencer saw total like-for-like UK sales rise by 1% over the eight weeks to 24 December, but over the 13 weeks to 28 December, sales actually fell by -0.2%, which the group blamed on ‘an exceptionally unseasonal October’.
General merchandising sales rose by 1.5%, or 0.5% on a like-for-like basis over the eight week period after heavy promotion and discounting. Food sales continued to perform strongly, up 3.8%, or 1.5% on a like-for-like basis over the eight week Christmas period.
James McGregor, a director of retail consultants Retail Remedy, said: ‘The discounting-led uptick in general merchandise during the Christmas period has given M&S a boost but should not divert eyes away from the weak quarterly number.
‘[Chief executive] Mark Bolland set December 2013 as the turning point for M&S’s general merchandise offering, but take away the heavy Christmas discounting and the retailer is struggling in this area.’
News sponsored by:
Ian McVeigh and Steve Davies, managers of Jupiter's UK Growth fund, talk about their predictions for the UK equity space. Click here to watch a series of sponsored interviews with Jupiter's fund managers on the UK equity market.
Today's top headlines
More about this:
On the road
by Himanshu Singh on Apr 19, 2014 at 05:21