M&S, Tesco and Morrisons hit by Christmas sales slump

10/01/2014

Three of the biggest names on the UK high street have all posted disappointing sales over the Christmas period, as digital shopping continues to rise.

Marks & Spencer, Tesco and Morrisons all admitted to “disappointing” Christmas trading.

Morrisons was the worst hit with a 5.6 per cent sales slump compared with the previous year. It had been expected to report its Christmas figures next week but brought them forward when the scale of the disaster became clear.

Morrisons shares this afternoon fell more than 7 per cent or 19p to stand at 235p.

Tesco’s sales were down 2.4 per cent, while M&S, which used model Rosie Huntington-Whiteley to front a lavish “Alice in Wonderland” themed Christmas campaign, said its clothing and homeware sales dropped 2.5 per cent — although food did better.

Bosses blamed an unprecedented frenzy of pre-Christmas promotions, “hard-pressed” consumers and “unseasonal” weather for their dismal performances but analysts pointed out that rivals such as Next, John Lewis and Waitrose — as well as discounters Aldi and Lidl — had done well.

For Marks & Spencer it was the third fall in Christmas non-food sales on the trot and will pile more pressure on chief executive Marc Bolland. City analysts said he had three months to prove he could turn around the business or face the sack.

Commenting on the results, Eric Abensur, the CEO of ecommerce solutions provider Venda, said: “Many traditional retailers continue to struggle with the switch to a more connected retail world and, according to this week’s announcements of Christmas results, some household names are still in the process of making this transition. Although consumers continue to hunt for bargains when they go shopping, whether that’s in-store, online, or on mobile, retailers should not get too caught up competing solely on price. Many retailers began their sales, both online and in-store, well before Christmas this year, which was underlined by figures this week from the British Retail Consortium that showed shop prices fell by 0.8% in December, the fastest rate in almost seven years.”

“The success of John Lewis over the holiday period goes to show that offering consumers a high level of customer service across all channels can reap dividends. John Lewis have also successfully used Click & Collect services to give consumers the convenience of picking up their shopping in-store or at their local branch of Waitrose, which not only drives online sales, but actually also highlights the continued importance of physical stores. Therefore, for brands that didn’t get the Christmas gift they wanted, such as M&S, it’s important that they compete on more than just price and offer a great shopping experience to their customers, regardless of whether they chose to shop online or on the high street.”

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