‘Super Thursday’ provides the papers plenty to chew over, with most of the Christmas trading updates finding space on the page.
Tesco topped the supermarket Christmas winners’ list with sales over the festive period outperforming the rest of the Big Four grocery giants, according to The Mail. The supermarket reported sales grew 1.3% over the 12 weeks to 1 January, just beating Morrisons’ 1.2% growth, and racing ahead of the 0.1% and 2.4% falls revealed by Sainsbury’s and Asda respectively, the paper writes. The Telegraph notes that Tesco signalled a return to strength after winning back shoppers from its rivals to grow market share for the first time in five years over the past quarter. The grocer also said upbeat trading would mean its operating profits would be “at least £1.2bn, maybe a bit more”, ahead of City expectations.
Higher sales of food, clothes and toys in the UK resulted in a strong Christmas performance as Tesco continued its turnaround (The Guardian). However, The Financial Times points out that momentum slowed in the run up to Christmas after it scrapped its loyalty card promotion. Shares also after Tesco reported same-store sales in the international division were down 1.2% in the Christmas period and up 0.6% in the third quarter, missing analysts’ expectations.
Marks & Spencer clothes sales rise for the first time in two years in a bumper Christmas period for the retailer, writes The Mail. The Telegraph adds the high street bellwether has stopped the rot in its clothing division with its best Christmas sales performance since 2011. The revival of Marks & Spencer under Steve Rowe showed signs of traction after the retailer posted better-than-expected trading over Christmas, The Times writes. M&S said like-for-like sales rose 2.3% in its clothing and home division and 0.6% in its food business in the 13 weeks to 31 December.
The Financial Times Lex column dampens enthusiasm, noting that looking at like-for-like sales growth is misleading for a mature business. Headlines may have hailed a turnaround but some two-thirds of this improvement was down to extra shopping days. Another chunk reflected online, the paper adds. Strip all that out and store-based clothing and general merchandise sales were “probably broadly flat”, according to management. Lex finishes by saying shareholders best hopes are still in the food business.
A warning by John Lewis that it will have to cut the staff bonus after pressure on profits is picked up in all the coverage, despite a rise in Christmas sales at the department store and Waitrose (The Times). Worries over impact of weaker pound override strong Christmas trading figures, The Financial Times writes. The Waitrose chain had a strong Christmas with sales at established stores up by 2.8% over the period, partly thanks to strong trading at the group’s growing network of in-store cafes and restaurants (The Guardian).
Concerns about waning growth at Primark resurfaced after ABF posted flat same-store sales over Christmas (The Times). Primark said its UK stores traded well over the Christmas period and had taken market share off other retailers, but the fast-fashion chain warned profits this year would be hit by the weak pound (The Financial Times).
The Financial Times looks at the winners and losers on the UK high street, noting “a solid Christmas trading period for Tesco and Primark, but others suffer”. The Guardian also summarises all the Christmas retail trading updates. Despite the improved recent trading, retail executives are divided over whether the cheery Christmas will mark a turning point in the sector’s fortunes. The Financial Times examines what the Christmas results mean. “Some of the biggest names on the British high street delivered bumper Christmas sales, providing fresh evidence that consumer spending remains buoyant since the Brexit vote,” The Telegraph says in an opinion column.
Food prices ended 2016 higher for the first time in four years, thanks to a jump in vegetable oil, sugar and dairy, according to the UN Food and Agricultural Organization (The Financial Times).
Mondelez is planning to slap a 20% price rise on Cadbury’s Freddo bars to ease Brexit pressures, The Guardian reports. It follows cutting the weight of Toblerone bars and will likely affect other Cadbury’s chocolate bars.