There’s no denying that 2009 was tough. But for UK retailers, the
year ended more cheerfully than it began.
According to the KPMG Retail Sales Monitor, UK retail sales
values for December 2009 were up 4.2 per cent on a like-for-like
basis from December 2008. “These are stronger figures than
we dared hope for,” said British Retail Consortium director
general Stephen Robertson, adding that the rise represents the
“best total sales growth for a December since
2005”.
UK web sales for December were also strong: an estimated
£5.46 billion, according to the IMRG Capgemini e-Retail
Sales Index, up 17 per cent from December 2008.
Online lifts high street
With the exception of PC and video games retailer Game, which
suffered a sales decline of 12.1 per cent for the five-week period
ending 9th January, the high street fared rather well this past
Christmas. Unlike in 2008-widely touted as the worst Christmas
for retailers since at least 1994-store-based sales at
multichannel retailers were ahead in 2009. But the direct and
online divisions were the true star performers.
At department store Marks & Spencer, for example, overall
like-for-like sales for the 13 weeks to Boxing Day were up less
than 2 per cent from the previous third quarter, whilst online
sales climbed 32 per cent. It was a similar story at
maternity/nursery cataloguer/retailer Mothercare, which saw
direct sales for the 13 weeks to 8th January jump 19.5 per cent
from the previous year and total UK sales in the run-up to
Christmas rise a more modest 2.5 per cent.
Amongst other positive results: At fashion and decor merchant
Next, catalogue and web sales for the 22 weeks to 24th December
were up 6.8 per cent from the previous year, and retail sales rose
4.6 per cent. At computer and electricals retailer DSG
International, the parent company of PC World, Dixons, and
Currys, like-for-likes were up 8 per cent for the 12 weeks to 9th
January, whilst like-for-like web sales increased 15 per cent,
beating market forecasts.
With sales of £1.92 billion for the 18 weeks to 2nd January,
general merchandiser Argos also outperformed expectations,
according to a statement from parent company Home Retail Group.
Total sales were up 3.9 per cent compared with the previous year,
although like-for-likes rose a scant 0.1 per cent. The web
accounted for 35 per cent of sales, up from 30 per cent a year
ago.
Strong December sales also helped boost apparel
cataloguer/retailer Cotton Traders’ year-round performance. It
enjoyed a 31 per cent jump in like-for-like sales between 1st
December and Boxing Day 2009 compared with the previous year, a
surge that compensated for a 20 per cent drop in like-for-likes in
September and October due to the unseasonably warm weather and
the postal strikes. Thanks to the better-than-expected
performance at Christmas, Cotton Traders now expects revenue for
the year to 31st January to hit £70 million, an 11 per cent
lift from the previous year.
Jolly results from cataloguers
Christmas was especially merry for etailers and cataloguers.
Online marketplace Notonthehighstreet.com is a case in point: It
grew year-on-year sales for the 11 weeks to 18th December by 147
per cent. Total sales for 2009 rose 183 per cent, from £2.27
million in 2008 to £6.43 million. The business, which says
it’s on target to reach £13.5 million in turnover this year,
attributes much of its success during the past year to an
increase in circulation of its print catalogues, from 80,000 to
400,000. Marketing director Jo Kite adds that Notonthehighstreet
is upping the frequency of its catalogues from three to six a
year in 2010 to take advantage of seasonal events and better
promote its primary product categories.
Another gifts cataloguer, the Handpicked Collection, outperformed
its Christmas forecast by 27 per cent and reported a 46 per cent
like-for-like annual sales rise. The company credits ongoing
search engine optimisation efforts on its website for much of its
success, describing it as a “key factor of growth” in
a statement.
Also among the winners is the Hut Group. The home entertainment
specialist enjoyed a 188 per cent jump in the number of orders
processed in the six weeks leading up to Christmas 2009 compared
with 2008. Without disclosing specifics, the company stated that
turnover benefited from “a similar uplift”.
Once again discount fashion cataloguer ?M and M Direct performed
well during its key trading period. The company shipped 836,000
orders during the festive season-a 20.3 per cent rise from
Christmas 2008. It also enjoyed a 21 per cent sales uplift for the
10 weeks ended 3rd January. Bolstered by its continuing growth, M
and M is planning further expansion in 2010, most notably
launching a German-language website in the coming months.
Christmas was also merry and bright for general merchandiser
Shop Direct Group, the owner of Woolworths, Littlewoods, and
Very. Sales for the six-week period to 1st January were up 6.3
per cent on the previous year and margin growth was
“significantly ahead of sales growth” as a result of
less clearance activity.
Eco-friendly fashion etailer Adili also had a tighter focus on
margin at Christmas. In July and August, keen to drive cash into
the business, Adili engaged in heavy discounting. Since then the
company, which trades as Ascension, has shifted away from sales
and markdowns, but it still managed to deliver a year-on-year
sales increase of 36 per cent for November and December.
Gross margin at multititle mailer N Brown Group dipped by 0.3
per cent for the 19 weeks to 9th January compared with the
previous year due to increased provisions for bad debt. Sales
continued to perform well, however, up 4.9 per cent from the
previous year. Comparable revenue, which excludes sales from the
German division of women’s fashion brand Simply Be and recently
acquired menswear retailer High & Mighty, rose 3.6 per cent.
Though it faced tough comparables-up against 118 per cent growth
in the nine weeks to 16th January 2009-fashion etailer ASOS.com
continued to defy the recession by meeting all its targets. It
posted a year-on-year sales rise for the five weeks to 3rd
January of 30 per cent; for the 42 weeks to 17th January, sales
rose 38 per cent. Analysts are predicting a 41.8 per cent increase
in pretax profit for the fiscal year ending March 2010, from
£14.1 million to £20 million.
Even some companies that posted sale declines will have fond
memories of Christmas 2009. For instance, fourth-quarter sales at
multititle mailer Flying Brands fell more than 37 per cent, to
£6.79 million for the three months to 1st January. But
because the decline was due largely to a focus on more-profitable
customers and an end to unprofitable recruitment, the company
expects to exceed profit expectations for the year. It’s Flying
Flowers brand was on target for the first time in “several
years”, despite a 32.3 per cent tumble in sales, to
£3.58 million. Sales in the gardening division, which
includes Gardening Direct, fell 18.4 per cent, to £1.51
million. The entertainment division, which includes the Listen2
audiobooks business, saw sales decline by 15.6 per cent, to
£1.51 million. This year will see Flying Brands focus on
“growing revenue, customer numbers, and profits in our core
brands”.
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