Christmas 2019 was the result of poor planning

On the face of it, the news from the high street this Christmas wasn’t the best. The picture from the big grocers was mixed. Tesco enjoyed its biggest ever day of food sales, its online business seems to be booming, while Aldi must be pleased having had its first billion-pound Christmas and seeing sales up almost 8%. Sainsbury’s did OK but was hit by the Argos side of the business and a fall-off in toy and video games sales but still saw a smaller overall decline than did Morrisons.

According to the British Retail Consortium combined overall sales for November and December were down by 0.9% and for 2019 as a whole down by 0.1%. Those figures are not inflation adjusted. So build in consumer price index inflation at 1.5% (Nov 18-Nov 19 ONS) and the picture is grim.

There are crumbs of comfort to be had from the BRC, for instance that December sales were up 1.9% (unadjusted) on the previous year, but given that the timing of Black Friday and Cyber Monday gave December last year a boost not applicable in 2018, it’s thin gruel.

I want to make it quite clear, I’m no harbinger of doom when it comes to bricks and mortar retail. I think it has a bright future. There are plenty of new entrants in our town and city centres that are doing well with new formats and fresh ideas. Pop ups are dipping their toes in the water. There are even signs that high street property prices have bottomed out. Nor am I rushing to put my money on online retail. Too many e-tailers aren’t turning a profit and investors shoring them up in the hope that they’ll be able to outlast traditional shops are taking a big gamble.

There are always lessons we can learn from difficult situations like the ghost of the latest Christmas past.

Particularly interesting is the news from two real retail icons, M&S and John Lewis. M&S food generally did well but the chain got mince pies wrong. There’s no real excuse for that. It’s something that a good, modern demand forecasting system should be able to nail with ease given that M&S will have years of historical mince pie data. On the plus side, M&S’s loss was a gain for food banks across the UK, because Marks and Sparks did the socially responsible thing and made sure those pies found a good home.

As for clothing, M&S went big on skinny jeans. Seriously, I’m no fashion guru but I know M&S shoppers and skinny jeans surely do not fit their profile.

Over at John Lewis things also look worrisome with a real possibility the store won’t pay its partners a bonus for the first time since 1953. Chairman Charlie Mayfield said this was partly down to the company’s decision not to cut prices as deeply as its competitors in response to falling sales “in part to preserve brand reputation and position,” he told The Guardian. This may be the right decision and we should not only look at top-line sales numbers, however, it does not appear to have worked for the business. I also wonder if this is just an easy answer. I for one tried to shop in John Lewis over Christmas and their inventory was not in great shape; way too much of some things and no stock of others. This was particularly noticeable across sizes, something they should have the history to get right.

Both M&S and John Lewis will be asking some hard questions in the damp, grey light of the New Year. Top of the list should be this: ‘why do people come here?’

John Lewis seems to think, and probably rightly, that it’s for a premium shopping experience; great service, pleasant surroundings, high-quality aftersales support. Ensuring that John Lreid stores don’t merely serve as a showroom for online discounters is going to be a challenge, but given the internet’s propensity for dishing up fakes and fly-by-nights there’s doubtless a market out there that values trust above everything.

M&S has been searching for its answer to that question for years. Personally I think it should stop thinking in terms of high fashion and chasing the younger shopper, and start thinking purely in terms of apparel. Go look at Uniqlo or Zara. Those stores know not to compromise on quality or take on chains that aren’t their competition. People need clothes. Most of them are satisfied if they leave a store with good quality, well-made things that keep them comfortable . Then it’s just the most important thing of all; ensure you have the right colours and sizes in stock.