Tesco achieved its highest rate of Christmas sales growth in the UK since December 2009, signalling that British consumers were willing to spend on food despite cutting back in other areas (Financial Times £). The grocer said like-for-like sales over Christmas rose 2.2% in its UK stores, compared with the same period last year (The Guardian). Its growth over the third quarter was much weaker, however, at just 0.7%. Tesco has beaten City expectations and toasted a victory over its ‘big four’ rivals following its best Christmas performance since 2009 (Telegraph, Daily Mail). Tesco said it outperformed the market in both volume and value during the Christmas period, as customers responded positively to its “festive 5” vegetable offer, which sold 19.7 million units (The Times £).
Marks & Spencer left its full-year profit forecasts unchanged after relatively weak Christmas trading in stores was offset by a stronger performance online (Financial Times £). Steve Rowe, chief executive, said that guessing when the retailer would see a recovery in sales was “a bit crystal ball, particularly in terms of the consumer backdrop… I wouldn’t want to call it” (Telegraph). The retail chain, which has been in turnaround programmes for more than a decade, has maintained its full-year profit guidance (The Times £). Marks & Spencer has blamed a challenging November, heavy discounts by rivals and lower in-store footfall for falling sales over the three months to 29 December (Daily Mail).
“M&S investors should know one turkey does not make a turnround,” writes Matthew Vincent for the Financial Times’ (£) Lombard column. “M&S turkeys might have helped its third-quarter like-for-like food sales beat analysts’ low expectations. But they were still down 2.1% year on year— an eighth straight quarter of flat or negative like-for-likes.”
UK high street stalwart John Lewis has said it might be forced to suspend its annual staff profit share for the first time since 1953 (Financial Times £). The department store group, which is Britain’s biggest employee-owned business, said on Thursday its board would “need to consider carefully” whether the “payment of a bonus is prudent in the light of business and economic prospects” (The Guardian). Despite positive performance over the festive season, the retailer said that it needed to consider whether paying a bonus was “prudent” as it deals with challenging trading (Telegraph). Though the Waitrose owner said it had the “financial strength and flexibility to pay a modest bonus”, it admitted it had been plagued with slower sales growth, tighter margins and higher costs (The Times £, Daily Mail).
“It’s time for John Lewis to ditch its ‘never knowingly undersold’ promise”, writes Jon Yeomans for The Telegraph.
Tesco and Marks & Spencer have become the latest big names to reveal they are stockpiling packet and tinned foods as retailers’ no-deal preparations move up a gear now that the frenetic Christmas trading period is behind them (The Guardian). The Tesco chief executive, Dave Lewis, said the supermarket has been holding a special round of talks with its suppliers and increasing stocks of long-life groceries.
Britain’s retailers suffered their worst Christmas trading since the depths of the global financial crisis, with heavy price cutting failing to persuade worried customers to splash out (Financial Times £). Retail sales data compiled by KPMG with the British Retail Consortium estimated that sales were flat in December against an increase of 1.4% in the same month the year before, the worst performance in December since 2008 (Telegraph, The Guardian).
Investors’ worst fears of more profit warnings at major retailers may have been averted on “Super Thursday” but big chains including Marks and Spencer and Debenhams provided little evidence that their turnaround plans were yet working (Financial Times £).
“The capacity of Britain’s shopping giants to whinge knows no bounds,” writes Alex Brummer in the Daily Mail. “The latest bunch of end-of-year trading statements left no excuse unsaid. The weather is either too cold, too warm or too wet. Business rates, the apprenticeship levy, unfair competition from Amazon, Black Friday and shrinking footfall are all too blame. It couldn’t possibly be strategically weak boardrooms, unimpressive executives, complacent management, overpriced goods and poor service.”
Discounter B&M European Value reported a “pleasing” end to 2018, despite “uncertain trading conditions” and a difficult November (Financial Times £). The company said “disappointing” November trading at its flagship B&M UK chain had given way to a December uptick, which had continued into the New Year. It said its “busiest ever” peak Christmas period meant like for like sales in the final month were up 1.2%, despite a full quarter drop of 1.6% (Telegraph).
The Coca-Cola Company has shaped China’s policies towards its growing obesity crisis, encouraging a focus on exercise rather than diet and thereby safeguarding its drinks sales, an academic investigation has alleged (The Guardian).
A diet rich in fibre can cut the risk of early death by up to a third, a study published in The Lancet suggests (Telegraph, The Times £).
A supply shortage has led to a 300% surge in the price of lemons in Australia, making them more expensive than mangoes, pineapples, chicken fillets and beef burgers (The Guardian).
Debenhams has refused to rule out a company voluntary arrangement or raising more equity as the chain begins refinancing talks with lenders following a steep slide in sales (Telegraph).
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