Christmas sales rise at Tesco and M&S but Asos falls – Business Live | Business

Introduction: A flurry of Christmas shopping announcements

Good morning and welcome to our continuing coverage of business, financial markets and the world economy.

Retail Super Thursday is when a large number of UK retailers, including Tesco, Labels & Spencer, ass and The Halfords report back to the City on how they got on over Christmas.

AND Tesco reaffirmed its profit guidance for the current financial year; it still expects retail-adjusted operating profit of between £2.4bn and £2.5bn.

Tesco says it is the only major grocer to have increased its share of the UK market compared to pre-pandemic levels, with a 27.5% market share.

Sales in the UK and Republic of Ireland (ROI) over the Christmas period were 7.8% higher than a year ago. In the 19 weeks to 7 January, like-for-like sales were up 6.1%.

Ken Murphy, CEO, says Tesco achieved strong UK market share and ROI.

Murphy warns that “difficult conditions” lie ahead, but says:

I am extremely proud of the way Tesco has stepped up to help customers facing difficult times this Christmas.

By relentlessly delivering on the strategic priorities we set 18 months ago, we’ve made sure customers know they’ll benefit from great value and quality in every part of their shopping cart, regardless of where they choose to shop with us.

Tesco highlights its Aldi Price Match, which ties 600 key products to its discount competitor’s prices, and Clubcard Prices which helped shoppers spend less on festive products.

Tesco’s low everyday prices sales volume jumped by 7.4%, as shoppers sought cheaper goods in a cost-of-living crisis.

Tesco Q3 +4.3%
Christmas +7.2%

The only grocer to maintain market share in the pre-pandemic period.

— Steve Dresser (@dresserman) January 12, 2023

Across the main street, Marks & Spencer announced “strong Christmas trading results”, with its food division achieving its highest-ever market share over the four-week holiday period.

M&S’s like-for-like sales rose 7.2% in the last 13 weeks of 2022, with food spending up 6.3% and clothing and home sales up 8.6%.

M&S had their biggest ever Christmas sale of over £80m on 23rd December; supported by improved availability and strong demand for seasonal lines including turkeys.

Stuart Machin, M&S’s chief executive, says more customers shopped with M&S over the Christmas period than in recent years.

M&S maintained trading momentum through the peak of the quarter, with food & clothing and home delivering strong growth.

M&S Food outperformed the market by volume and value in the critical four-week Christmas period for the second year in a row to achieve its highest ever market share. Clothing and Home delivered another outstanding performance, maintaining its leading market position with the highest market share in seven years.

But ASOS had a tougher time, with UK sales down 8% in the last four months of 2022.

ASOS it blamed “weak consumer sentiment”, saying economic and political disruptions surrounding the disastrous mini-budget in September had hit demand. It also cites a delivery disruption last month (when Royal Mail workers were on strike):

He says:

This was particularly significant in September, which was affected by the national news flow, and December, which was affected by the disruption in the shipping market.

Total revenues fell 3%, which ASOS said reflected “challenging trading conditions”.

AND The Halfords has cut its profit forecast, citing weaker demand in the bicycle and car tire markets due to macroeconomic challenges.

He says:

Macroeconomic headwinds continue to affect the bicycle and consumer tire markets although we have gained share in all of our measured markets, including bicycle, automotive and tires.

Ah, “Super Thursday” with about 15 trading updates 🫠. M&S reports best clothing market share since 2015 as fashion sales rise 8.8%. Tesco claims to be the only major grocer to see its share rise as holiday sales rose 7.8%. Profit warning at Halfords and tough times at Asos due to sales slip

— Ashley Armstrong (@AArmstrong_says) January 12, 2023

Other big hits from the UK retail sector have achieved good Christmas sales figures so far. Yesterday Sainsbury’s and JS Sports both said their profits would hit the upper end of expectations.

Also coming today

Ministers have been urged to stop the forced installation of pre-paid meters after Citizens Advice revealed that more than three million people across Britain lost their credit last year, the equivalent of one every 10 seconds.

And financial market investors are hoping for a drop in U.S. inflation later today, when the consumer price index for December is released. It is forecast to fall to 6.5%, from 7.1% in November.

Daily agenda

  • 7am GMT: China vehicle sales data for December

  • 9.30 GMT: Latest UK economic and business activity data from the Office for National Statistics

  • 13.30 GMT: US inflation report for December

Leave a Reply

Your email address will not be published. Required fields are marked *