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TMCNet:  'Bricks and clicks' fuel John Lewis surge: Christmas sales rise in stores and online Retailer kicks off festive reporting in upbeat style

[January 01, 2014]

'Bricks and clicks' fuel John Lewis surge: Christmas sales rise in stores and online Retailer kicks off festive reporting in upbeat style

(Guardian (UK) Via Acquire Media NewsEdge) John Lewis is likely to have beaten the market for the fifth Christmas in a row, having recorded a 7% rise in like-for-like sales in the five weeks to 28 December.

While most retailers will not disclose their festive performance until next week, John Lewis has revealed a surge in sales of electrical goods, beauty products and clothing in November and December in which the department store group is likely to have taken market share from rivals.


Total sales for the five weeks to 28 December reached pounds 734m.

John Lewis was boosted by a 22.6% rise in online sales compared with the same period in 2012, accounting for almost a third of its total sales over the period.

But sales in stores were also up, by 1.2%, as shoppers snapped up last-minute presents on the high street and were tempted to buy additional items when they went to stores to pick up goods ordered online. At least a third of shoppers coming into stores to "click and collect" bought something else while they were there.

"Growth was well spread," said Andy Street, the managing director of John Lewis. "It's because of how we've got bricks and clicks to work hand in glove." He said the retailer had an "absolute corker" online earlier in the season and that the shops had done well close to Christmas and at the clearance sale on 27 December. That day was a new record sales day for John Lewis stores, with the business as a whole taking pounds 35.6m.

Street said: "This Christmas has seen trade take a different shape to previous years, with an early peak driven by Black Friday and a huge surge in the final 10 days." He said he recognised there was a danger that the success of Black Friday - the US tradition of a discount day on the first weekend in December - would increasingly set the tone for a Christmas trading period dominated by deals and promotions. But he added that John Lewis had not experienced that problem this year. "It's about the business being absolutely clear about when we are discounting and when we are not," Street said.

John Lewis did run discounts ahead of Christmas because its commitment to be "never knowingly undersold" forces it to match deals offered by rivals. But Street said the retailer did not discount its own-label ranges before 27 December and that strategy paid off in a strong start to its post-Christmas clearance sale.

"It was definitely the right move to hold off on discounting our own product until after Christmas and the market showed it was strong enough to bear it," he said.

John Lewis's success with that tactic bodes well for Next, the fashion and homewares retailer that was among the handful of high street firms that avoided discounting ahead of Boxing Day. Next will reveal its Christmas trading performance tomorrow, kicking off a flurry of statements from listed retailers over the next few weeks.

Both John Lewis and Next's strategies differed markedly from Debenhams, which was forced to warn on profits earlier this week when its chief executive, Michael Sharp, described the high street as having been a "sea of red" in the runup to Christmas, with clothing chains attempting to clear unwanted stock.

While Debenhams reported virtually flat sales and falling margins, Street said margins had held up at John Lewis and that fashion and beauty sales rose 8.5%. Growth in sales of jewellery, accessories and menswear helped to compensate for what was a tough season for clothing.

Performance elsewhere in John Lewis gives a clue to how the rest of the high street might fare.

Electricals and home technology sales at John Lewis rose 10.7%, with the strongest growth coming from kitchen gadgets such as coffee machines, toasters and kettles, as well as from vacuum cleaners. Their sales growth outstripped iPads, despite one of the Apple tablets being sold every 10 seconds in the week before Christmas. But the total value of hi-tech sales was greater.

Another positive sign came in home furnishings, where sales rose 2%, which Street said was owing to a pick-up in the housing market.

(c) 2014 Guardian Newspapers Limited.

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