Christmas cheer fails to reach all retailers

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The Independent Online
Kingfisher and Allders, the department store operator, became the latest retailers to report an upbeat message on Christmas trading yesterday. However, poor figures from Laura Ashley, where sales growth was modest, and Body Shop, where sales were down on last year, showed that the upturn in consumer spending has not been enjoyed across the high street.

With more than a dozen retailers having issued their Christmas trading statements, it seems clear that high street trading has been healthy rather than a bonanza.

Clive Vaughan of Verdict Research said: "If there is a trend out there it is that the retailers who are appealing to the upper ends of their markets are doing well." He noted that in jewellery, Ernest Jones, Goldsmiths and Asprey were doing well. But at the lower end of the market, sales growth at Argos and H Samuel had been less impressive.

"To some effect we are still seeing the Tessa effect," Mr Vaughan said. "That benefited mainly older, more affluent people and so we are seeing good sales of upmarket cars, like Jaguars, of longer-haul holidays, and of top end furniture and home computers.

"There are a lot of people out there who are getting bonuses this year who didn't receive them last time. If there is a message here it is that the richer consumers seem to be getting richer. But for the mass of the population things are growing quite slowly."

It is a view supported by Nick Bubb, retail analyst at MeesPierson. "Consumers are still a bit scarred by the recession and the effect that had on confidence."

Of yesterday's trading statements, Kingfisher's was the most prominent with good sales increases encouraging analysts to upgrade their profits forecasts to around pounds 280m for the current year.

Kingfisher's group sales in the nine weeks to 4 January increased by 7.8 per cent on a like-for-like basis compared with last year.

Star performers were B&Q and Comet, where sales grew by 14 per cent. Woolworths also performed strongly with an 8 per cent sales lift in which toys, Christmas products and home essentials did well. Kingfisher chief executive Sir Geoff Mulcahy said Woolworths benefited from "an environment where customers were concentrating on value for money".

At Allders, like-for-like sales improved by 11.6 per cent in the 15 weeks to 11 January, one of the most impressive sales gains reported so far this year. The department store group also said the latest three weeks of its winter sale had gone well with sales up 16 per cent on last year.

The news was more mixed at Laura Ashley, the fashion and furniture retailer. It is shaking up the management at its European division after a steep decline in sales there. Though group sale rose by 3 per cent in the six weeks to 24 November, sales in Europe fell by 8 per cent.

Andrew Stevenson, who was head of retail operations in the UK and Europe, is leaving by mutual agreement. The role will now be split in two. Laura Ashley blamed difficult markets but also said its product range had not been right. Like-for-like sales in the UK were 10 per cent higher but US sales were flat.

Body Shop reported the worst retail trading statement of the day with a 2 per cent slump in like-for-like sales in the 10 weeks to 4 January. Comparable sales were lower in the UK, Europe and the US. Chairman Gordon Roddick admitted the performance had been mixed but added that the US business was improving.

Upbeat trading statements are expected later this week from Blacks Leisure and JD Sports.

Christmas trading on the high street

The winners

sales incr on last yr (%)*

John Lewis (exluding Waitrose) 12.3

JJB Sports 12

Allders 11.6

Goldsmiths 9.8

Next 9

Signet (H Samuel, Ernest Jones) 8.5

Littlewoods 8.2

Dixons (incl Currys, PC World, The Link) 8

Kingfisher (Woolworths, B&Q, Comet, Superdrug) 7.8

Boots (incl Halfords, Do It All, Fads) 6

The losers

sales changes on last yr (%)*

Body Shop -2

Sears (Selfridges, British Shoe, Wallis, Adams) -0.5

Laura Ashley +3

Argos +4**

*like-for-like sales increases, stripping out new store openings

**half the rate of City expectations