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High street stutters but online sales soar over Christmas

Online triumphed over bricks-and-mortar during the festive season, as multichannel operators and pureplay etailers enjoyed “bumper” sales in the run-up to Christmas.

On Tuesday, Boohoo reported that strong trading on Black Friday had continued into the Christmas season, and sales soared 55% year on year to £114.3m in the four months to 31 December.

It has upped its full-year guidance to between 43% and 45% revenue growth, above the previous guidance of between 38% and 42%. This excludes PrettyLittleThing, which Boohoo acquired on 3 January. 

Asos, which is due to report its figures later this week, is expected to announce similarly strong Christmas trading.

Sales at womenswear retailer Quiz rose 19.2% year on year from 1 October to 31 December, thanks to strong omnichannel growth over the  Black Friday, Christmas party and festive trading period. Online sales in the UK and Ireland outperformed its bricks-and-mortar stores, rising by 75% compared with 6.7%. 

Similarly, online sales at outdoor retailer Mountain Warehouse were up 32% in the six weeks to 1 January, while like-for-like sales grew by 13.6%. Total sales were up 28.7%.

The BRC (British Retail Consortium)-KPMG Retail Sales Monitor showed online sales of non-food retail products, which includes fashion, footwear, home and health and beauty, grew 7.2% in December.

Conversely, sales in mid-market high street fashion multiples were down 1.1% in December, accountancy firm BDO’s sales tracker showed. A positive final week, up 8.3%, was not enough to combat unseasonably warm weather and lower footfall earlier in the month.

The results highlighted the challenges for some of the more traditional high street retailers, such as Next, which last week announced a 0.4% fall in full-price sales for the 54 days to 24 December. This was against weak comparatives in 2015. 

In-store full-price sales for the period were down 3.5% on last year, while its “directory” sales, which includes Next Label and online, were up 5.1%. The retailer cut its central profit guidance for the full year to £792m, from £805m.

Honor Strachan, lead analyst at Verdict Retail, said value and trend-led retailers fared better than mass market firms over the festive season: “The value segment will outperform the rest of the market. Boohoo and other trend-led brands who are faster, react to trends more quickly and are less exposed to unseasonal weather, have done well over Christmas.

“Those with trans-seasonal ranges, such as Ted Baker, Asos and H&M, are also expecting strong figures. It’s the mass market that will have a difficult time, like Next.”

Next’s full-price strategy failed to pay off. However, a refusal to discount before Christmas proved successful for other retailers, such as Selfridges and Jigsaw.

Selfridges reported a sales surge of more than 18% in December 2016, compared with 2015.

Similarly, Jigsaw’s sales were up 10% year on year during the five weeks to 31 December. The retailer, which kept products at full price until shops closed on Christmas Eve, described it as a “record period” for online sales. December was also its best month to date for international trade.

Marks & Spencer, JD Sports, SuperGroup, Mothercare, Debenhams, Moss Bros, Primark and John Lewis are due to report their Christmas figures later this week.

M&S is expected to report a slight increase in clothing sales over Christmas.

 

 

 

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