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'Last-minute' spending lifts Christmas trade

“A very late Christmas spending rush” helped to bolster sales for the festive trading period, clothing and footwear retailers have told Drapers. 

Next kicked off the official Christmas trading updates last week, reporting a 15.3% rise in online sales for the nine weeks to 28 December, which helped to offset a 3.9% fall in-store sales. Overall, its full-price sales were up 5.2% on the same period in 2018.

“We believe our sales performance in the period was helped by a much colder November than last year and improved stock availability in both our retail stores and online”, a Next spokesman said. 

As a result, Next now expects total full-price sales growth of 3.9% for its full year, to the end of January 2020, which is 0.3% ahead of the guidance given in October.

Meanwhile, Mountain Warehouse enjoyed a 16.2% rise in sales to £95.8m for the 13 weeks to 29 December, compared with the same period in 2018. Online sales rose 21.6%, and the retailer remains on track for record full-year profits. 

John Lewis & Partners reported a 5.8% surge in clothing sales for the week to 29 December, against the same week in 2018. It is due to release a full trading update for the festive season on Thursday, as is Marks & Spencer

Industry sources told Drapers that online sales helped to boost overall trading figures, as bricks-and-mortar spending took a back seat. 

“We experienced an extremely strong Christmas trading period, posting triple-digit growth on the prior year,” said Thomas Beahon, co-founder of sportswear brand Castore.

“As a predominantly digital retailer, we are continuing to benefit from the ongoing migration of consumer spend away from the high street to online platforms, but our store also performed very well, demonstrating the importance of a multichannel offering.” 

Mark Neale, Mountain Warehouse founder and CEO, said Christmas trading had been “very positive”: “We have a family-friendly positioning, so we do very well with kidswear in particular at Christmas.

“Online sales were up against in store because it’s how the market is heading at the moment. International sales [30% of total sales] were also up over the period.”

He added: “Black Friday was actually our busiest day ever – it has been for the past two or three years. People like a deal, particularly in our part of the market. After that, sales were quiet, and then there was a very late Christmas spending rush.”

The CEO of one high street retailer said sales were up like for like on 2018, despite people spending “a lot later” than last year, adding: “The end-of-year Sale was slightly slower than [we’d] have liked. We’re trying to work out whether a later Black Friday meant people bought more and it has affected the end-of-season Sale. It was tougher for shops [than online].”

Shop prices fell 0.4% year on year in December, as retailers sought to drive sales in the run-up to Christmas. The figure was flat compared with November, but below the 12-month average of 0% growth, the BRC-Nielsen Shop Price Index showed.

“Anecdotally, it feels as though consumers are holding off for a deal or bargain more now than in the past,” the managing director of one footwear retailer said.

“We saw single percentage [increases] in overall December trade. However, trade within the Christmas week was positive, indicating consumers were holding off until the very last minute.”

He added: “Sale product has been encouraging, bolstering online transactions, and this trend has continued into January.”

Martin Ingram, managing director of footwear brand Josef Seibel, believes the election in mid-December provided a “distraction” for consumers: “The result instilled greater certainty.

“Business in key accounts for Josef Seibel provided positive results against last year, although the strength came in the first and last weeks of December. Despite reports of a poor Boxing Day on the high street, trading from 27 December has been strong for the brand across all channels, online and in store.”

 

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