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Multiple retailers ‘out-perform’ over Christmas period

A significant number of retailers are posting upbeat sales figures during the Christmas period, including Selfridges, Next, John Lewis, Aldi and Dunelm.

Selfridges revealed what it called a ‘record-breaking’ Christmas trading period, with sales up by eight per cent in the final week before Christmas and up 10 per cent in its Oxford Street flagship store during the 24 days prior to Christmas, driven it aid by exclusive products.

Meanwhile, supermarket Aldi reported its ‘best-ever Christmas period’, with sales topping £1 billion in December as a whole, fuelled in part by 17 million bottles of wine, champagne and prosecco sold.

Homeware specialist Dunelm reported a 5.7 per cent increase is sales for the 13-week period ended December 29th, with total like-for-like revenue in its second quarter up a 9 per cent and online revenue up 37.9 per cent.

High street fashion retailer Next reported a sales growth of 1.5% for the last two months of 2018, with a spike in sales from the last three weeks of December, helping to save the chain and Christmas blushes.

However, there was a stark contrast between the store’s brick and mortar premises and online operation, with sales down 9.2% in the High Street, compared with a jump in website sales of 15.2%.

Lower profit margins have now been forecast as a result of fulfilling web orders, bringing annual profit down by £4m to £723m, with predictions of profits falling again Christmas 2019.

“Full price sales for the Christmas trading period have been in line with the guidance we gave in September,” the Next chief executive, Simon Wolfson, said. “Strong sales in the three weeks prior to Christmas along with a good half-term holiday week at the end of October made up for disappointing sales in November.”

Department store chain John Lewis also reported a strong finish to retail sales through the Christmas period as customers made late buying decisions, with an 11% rise in sales in the last week of 2018 compared to sales this time last year.

Attention will now focus on competitors Debenhams and Marks and Spencers.

“We think John Lewis and Next will have outperformed, however, so we still wouldn’t rule out some bad news from Debenhams or M&S,” retail analyst Nick Bubb said.

UK retail sales up sharply in Q2, despite June’s fall

The latest figures from accountancy giant EY show that June’s retail sales decline was not enough to prevent a robust outturn for Q2 as a whole, which remained on track to see quarterly GDP growth of around 0.4%.

EY says a broader look at the retail landscape suggests that sales have held up reasonably well given the pressures on spending power. However, it says there is little reason to expect much of a pickup in the short-term.

The firm says the strong retail performance in Q2 supports the case for a Bank of England interest rate hike at the August Monetary Policy Committee (MPC) meeting, after it was diluted by lower than expected consumer price inflation of 2.4% in June and weak earnings growth in May.

Howard Archer, chief economic advisor to the EY ITEM Club, said: “Retail sales volumes fell by 0.5% month-on-month on an including fuel basis in June. But given this followed two very large increases in April and May, sales over Q2 as a whole were still up by 2.1%. This was the strongest quarterly growth since Q1 2004, although the growth rate was heavily flattered by the comparison with the snow-disrupted first quarter. Tthe three-month rate is likely to drop back from July as the soft comparators drop out of the calculation.

“With today’s data suggesting only a modest drop in distribution output in June, we remain on track to see solid growth in services output of around 0.6% in Q2, with GDP set to grow by 0.4%.

“Given the extreme volatility of the monthly data, which can distort even the three-month averages, we often prefer to use a longer rolling average to better gauge the health of the sector. The six-months-on-six-months rate suggests that sales have held up reasonably well given the force of the headwinds from high inflation and weak wage growth, although sales growth remains well down on the 2014-16 period. We find it difficult to envisage much of a pickup in the short-term. Although the squeeze on spending power has eased, it is still not improving, and consumers’ desire to borrow appears to be reaching its limits.”

Contactless payments account for 51% of card sales

New data from Barclaycard’s Contactless Spending Index has revealed that 51 per cent of in-store transactions are made using ‘touch and go’ technology, up more than a third (34%) since the beginning of the year.
Industry body UK Cards Association (UKCA) has also revealed that credit and debit payments have doubled in the past 10 years, with the increased use of contactless driving the surge.
“Our data shows that growth in contactless spending has been surging for several years, but this latest insight is particularly significant as it shows shoppers now prefer to pay with ‘touch and go’, with more than half of eligible transactions made this way,” commented Adam Herson, mobile payments director, Barclaycard.
“September will mark the tenth anniversary of Barclaycard introducing contactless to the UK and during this time we’ve seen the technology evolve at a rapid pace – from mobile and wearable devices – to invisible payments such as our newly launched ‘Grab+Go’ concept, which allows consumers to scan and pay for their shopping with a smartphone.
“And with more innovation in the pipeline and a continued rise in consumer and merchant adoption, 2017 is on track to be another record-breaking year for contactless spending.”
Use of contactless has increased in the Midlands and the North of England more than anywhere else in the UK, with the biggest jumps in spending seen in Derby (up 45%), Chester (44%), Newcastle Upon Tyne (42%), Coventry (42%) and Stoke-on-Trent (41%).

UK Car Market Reaches “Peak Demand”

The UK new car market prepares for a fall as record breaking sales mark fifth year of growth.

Demand for new cars in Britain has reached its highest ever at 2.69 million in 2016, with a 2.3% increase on last year continuing the market’s steady rise since 2011.

With one of the most diverse car market in the world, nearly 400 different models are currently on the market and a further 70 are planning to be introduced in 2017.

However, between the length of the growth period, the drop in the strength of the pound and the uncertainty of the political landscape, this year is not expected to perform quite as well.

“We’re talking about a market that is at peak demand,” said head of the Society of Motor Manufacturers and Traders Mike Hawes, “There is undoubtedly a levelling off.”

More than 85% of cars sold in the UK imported, making trade post-Brexit vital, according to Mike Hawes, “Looking longer term, the strength of this market will rest on our ability to maintain our current trading relations.”

There’s a predicted 6% drop in sales in the year ahead, but with such record highs, this will not necessarily mean a crash on the road ahead.

High Streets Disappoint at Christmas Again

Christmas shop sales have dropped for a fourth year in a row following a boom in online shopping.

According to BDO’s High Street Sales Track, December’s growth ended on a relatively small -0.1%, but it follows last December’s -5.3%, the worst Christmas growth since 2008.

The unfortunate streak was nearly broken by a surge in lifestyle (+2.4%) and homeware (+2.6) sales, but they were eclipsed by a year on year decline in fashion of 1.07%.

Online sales increased massively this year, with the week before Christmas increasing to 51.1%, with an overall growth of +19%.

The falling strength of the pound could lead to further decline this year, according to Sophie Michael, head of retail and wholesale at BDO, who believes this year will be a ‘critical juncture’ for retail.

“With such a weak base for December 2015, any further decline can only be seen as a poor result for retailers,” she explains, “this fourth negative December in succession highlights the magnitude of the challenge that lies ahead for 2017.”


eCommerce Christmas sales expected to hit over £16bn in the UK…

The data and market research company, eMarketer, has predicted that UK retail eCommerce sales will reach an estimated £16.9 billion during the ‘core’ season shopping period of November and December; an increase from the £14.65 billion recorded in 2015 and the rising use of consumers making purchases via their smartphones considered a major contributor to eMarketer’s predictions.

According to analysis, the smartphone medium will account for 36.4 per cent of total retail mCommerce (mobile commerce) sales for the whole of 2016, and by the year 2020, total mCommerce sales is estimated to reach 52 per cent.

Senior analyst at eMarketer, Bill Fisher said: “Retail ecommerce sales during the festive season look set to shine this year, despite the wider economic conditions in the UK. This is in no small part due to a digitally advanced consumer, who has been quick to embrace digital buying and particularly smartphone buying. And during the Christmas shopping period, these digital habits become even more accentuated.”


Read more from eMarketer here

Thousands of Christmas retail temp jobs still available on UK market…

Surprisingly, 21,000 Christmas jobs are still available in the UK, marking a 24 per cent increase in the number of festive roles since last year as employers are working to fill seasonal contracts for an anticipated festive rush.

With the largest proportion of this year’s vacancies falling in the retail, logistics and sales sectors, data from Adzuna has revealed that big-name online and high street retailers are stocking up on extra staff this winter, leading to thousands of temporary, part-time roles flooding the market.  Average pay for these roles is in decline and advertised pay for seasonal workers has fallen from £11.50 per hour in 2015 to just £9.32 this Christmas season.

Co-founder of Adzuna, Doug Monro said: “With a wealth of negative news hitting the job market in 2016, this boost in festive vacancies is sure to put a smile on the faces of British jobseekers. It’s not all good news, however, as average pay for festive workers looks set to drop significantly compared to last year, suggesting some top retail employers may be hiring more staff for entry level positions and cutting back on higher paid management roles.”

In addition, Royal Mail, Amazon, Sainsbury’s and Marks & Spencer have the most jobs available, with over 70,000 positions predicted between these four major players alone.

Sales made via mobile fall for the first time this decade, IMRG claims…

Although many retailers have experienced tremendous increases in the interaction of mobile sales — such as The Entertainer which accomplished a reported overall rise of 120 per cent based on introducing a personalisation strategy to its email marketing platform — new statistics released by the ‘voice’ of UK e-tailing, the Interactive in Media Retail Group (IMRG) has found that sales made via mobile devices have fallen in the first quarter and is the first recorded decrease since 2010.

According to IMRG, the fall is likely to have been influenced by a ‘marked split’ that has recently been recorded in growth rates on tablets and smartphones. As previously documented, while sales through smartphones were up by 83 per cent in April this year, sales via tablet devices hit a record low with a growth rate of three per cent.

Despite the unpredicted fall, chief information officer at IMRG, Tina Spooner, remains optimistic about mobile bouncing back to its continued succession: “While the majority of these sales still come through tablets, shoppers are increasingly using their smartphones in situations where they would previously have used a tablet – the screen sizes have become larger, retailers have focused on optimising the experience for smartphone users and consumers are becoming increasingly confident in using these devices for a wide range of activities.”

Compared to the previous quarter where 51.3 per cent of retail sales were made via mobile, a two per cent decrease to 49.6 per cent was indicated in Q1 2016; as well as a one per cent decline in the number of sales from online retail websites directed via mobile, from 65.5 per cent in Q4 2015 to 64.6 per cent in Q1 2016.