Grocery retailers reported Christmas cheer this week with strong trading results - but warned the year ahead would be tough.
Chief executive Stuart Rose was first to spin the cautionary tale as Marks & Spencer reported good like-for-like food sales.
"Business will be more difficult this year due to cost inflation and belt tightening," he said. "We also have more disruption as 15 stores are currently being refurbished, so you can expect some slowdown."
Marc Bolland, chief executive of Morrisons, which surprised some City analysts with its Christmas trading figures, said the grocery market would have a difficult start to 2007. "The year has started with a very competitive first two weeks in January and that environment will continue for the next few months, but we will continue to stay competitive," he said.
Sainsbury's chief financial officer Darren Shapland agreed the year would be difficult - but said it would be no more so than 2006. "We don't see any significant difference to the trading environment in 2006. But now is the time of year when people tighten their belts and the market gets particularly competitive."
Research on advertising spend during December for The Grocer by Nielsen Media Research shows Tesco was the biggest spender. It spent £8.34m on press, radio and TV ads, up by £2.07m on last year. Sainsbury's lifted spend by 52% to £7.21m, Asda spent £4.32m, up 18.5% on last year and Morrisons cut its spend 9.4% on 2005 to £4.31m.
Despite healthy Christmas sales for the supermarkets, Nationwide said consumer confidence for 2007 was low and retailers would now have to work hard to woo shoppers. Its Consumer Confidence Index showed consumers were pessimistic about the economy and employment in the first half of the year.
Chief executive Stuart Rose was first to spin the cautionary tale as Marks & Spencer reported good like-for-like food sales.
"Business will be more difficult this year due to cost inflation and belt tightening," he said. "We also have more disruption as 15 stores are currently being refurbished, so you can expect some slowdown."
Marc Bolland, chief executive of Morrisons, which surprised some City analysts with its Christmas trading figures, said the grocery market would have a difficult start to 2007. "The year has started with a very competitive first two weeks in January and that environment will continue for the next few months, but we will continue to stay competitive," he said.
Sainsbury's chief financial officer Darren Shapland agreed the year would be difficult - but said it would be no more so than 2006. "We don't see any significant difference to the trading environment in 2006. But now is the time of year when people tighten their belts and the market gets particularly competitive."
Research on advertising spend during December for The Grocer by Nielsen Media Research shows Tesco was the biggest spender. It spent £8.34m on press, radio and TV ads, up by £2.07m on last year. Sainsbury's lifted spend by 52% to £7.21m, Asda spent £4.32m, up 18.5% on last year and Morrisons cut its spend 9.4% on 2005 to £4.31m.
Despite healthy Christmas sales for the supermarkets, Nationwide said consumer confidence for 2007 was low and retailers would now have to work hard to woo shoppers. Its Consumer Confidence Index showed consumers were pessimistic about the economy and employment in the first half of the year.
No comments yet