Conflicting Christmas message from retail giants

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The Independent Online
Two of Britain's largest retailers issued conflicting messages on Christmas trading yesterday as they released sales updates. Kingfisher, which controls Woolworths, B&Q and Comet, cheered the City with news of strong sales increases, which pushed the shares up 27p to a new high of 912p as analysts increased their profit forecasts.

However, Boots disappointed the market with lower-than-expected numbers. Its trading was affected by the mild weather and the absence of any flu outbreaks this year, which affected the performance of Boots the Chemists.

John Richards, retail analyst at NatWest Securities, said: "The Boots figures were not that bad but their rating now leaves no margin for error. At this time of year even the slightest nuance tends to be magnified."

Boots confirmed reports of a late surge in consumer spending before Christmas. Group sales in the third quarter were 6.8 per cent ahead of the same period last year. Boots the Chemists suffered from stock shortages caused by a warehouse fire in October, though healthcare sales were strong. Halfords' sales were up only 1.7 per cent.

But the plaudits yesterday went to Kingfisher, whose shares have enjoyed a surge since a profits warning three years ago. Sir Geoff Mulcahy, chief executive, said: "We have had a very good Christmas. Most importantly Woolworths achieved another strong performance as did our two other major brands B&Q and Darty [the French electrical subsidiary]."

Kingfisher's sales in the nine weeks to January were up by 8.2 per cent on a like-for-like basis. B&Q led the way with a 14.5 per cent sales gain. But sales at Comet, the electrical group, only rose 1.3 per cent. This added to gloom over Dixons' half-year figures which are due today.