Kingfisher brightens retail picture

KINGFISHER, the B&Q to Woolworths retail group, brought a ray of sunshine to Britain's gloomy high street yesterday as it reported solid growth in Christmas sales, led by growth at Woolworths and Superdrug.

Kingfisher's announcement coincided with a flurry of Christmas trading statements from retailers suggesting that "value-based" stores have fared better than higher priced rivals as consumers tighten belts.

Matalan, the edge-of-town discount clothing group that typically offers branded clothing at discounts of up to 50 per cent, reported strong sales growth. Signet, the former Ratners jeweller group, also did well.

Louise van Blixen, retail analyst at SG Securities, said: "If there is a trend emerging, it is that the discounters are doing better than the rest." John Richards of BT Alex.Brown added: "The general picture looks pretty gloomy, and it looks as if consumers are looking for value."

Yesterday's discount success follows good figures already reported by Merchant Retail, which runs the cut-price Perfume Shops, and Peacocks, the privately controlled clothing discounter.

At Kingfisher, the group saw same-store sales rise by 3.2 per cent over Christmas. Woolworths and Superdrug led with like-for-like growth of 5 per cent.

Sir Geoff Mulcahy, Kingfisher chief executive, said: "Customers were careful with their money in the run-up to Christmas, but overall we are pleased with the group's performance."

B&Q, its DIY chain, did not show the same improvement, with a sales rise of only 0.6 per cent against very strong sales this time last year. Darty, Kingfisher's French electrical chain, and Comet performed moderately, with same-store growth of 2 and 0.9 per cent respectively.

HMV Media, the HMV-Dillons-Waterstones combine formed last year, is expected to seek a stock market listing this year. The books and record retailer reported a 4.9 per cent rise in like-for-like sales in the five weeks to January.

Matalan combined a positive trading statement with expectations of improved profits. The company said full-year profits would now be "not less than pounds 23m" compared with analysts' forecasts in the range of pounds 17.7m to pounds 21.5m. In the five weeks to 2 January it recorded same-store sales growth of 11.4 per cent on the same period last year.

Signet, which controls the H Samuel chain, showed group like-for-like sales growth of 6.2 per cent in the weeks from 2 November to 24 December. "Group profits for the year to January should be somewhat ahead of market expectations," the group said. Signet's growth was fuelled by a strong performance in the United States, where its Sterling business saw sales up by more than 10 per cent on last year.