House of Fraser and Waitrose planning online investments

House of Fraser (HoF) and Waitrose published positive Christmas trading statements this week, with both retailers experiencing year-on-year sales growth over the festive season as well as announcing plans for eCommerce investment in 2015.

The department store chain described the six weeks to 3 January, when its like-for-like sales rose 8% and cash gross margins jump 9% compared to one year before, as a "record Christmas trading period" for the business. In comparison to rival John Lewis, which said on Monday that its sales directly leading up to Christmas Day were down on last year, House of Fraser actually saw record sales for the week before 25 December.

Upmarket grocer Waitrose, meanwhile, said that total sales for the five weeks ending 3 January were £728 million – an increase of 7% on the equivalent period last year. Like-for-like sales at the grocer grew by 2.8%.

Online sales were up 31.2% and 26.3% at HoF and Waitrose respectively. Both retailers referenced their individual investments in stores and online as key reasons for their sales rises, with each business also suggesting that further significant eCommerce-related activity is planned for the 12 months ahead. 

John King, CEO of the department store group, said: "Our performance demonstrates the success of our strategy to continuously improve our online proposition, develop both our house brands and premium branded proposition and invest in our stores to give our customers the best possible shopping experience."

"We will continue to invest in our online proposition and as a result we expect to continue to see sales growth from this channel. During 2014 we refurbished our store in Bath which has seen sales increase by 27% since the completion of the works and we plan to refurbish more stores during 2015 as well as build on our international portfolio."

Waitrose is continuing to build capacity in its online grocery operations with the opening of a new bespoke fulfilment centre in Coulsdon on 3 March, which is expected to employ 450 members of staff by the end of January 2016. However, the retailer is proposing to close its existing fulfilment hub in Acton, meaning some employees at the west London site are being consulted over moving to the new centre or to other areas of the business.

Reflecting on recent trading, which has been particularly challenging for the leading supermarket chains in the UK due to increased competition and ongoing price battles, Waitrose's managing director Mark Price said: "As a business owned by the people who work here, we can take the long-term view and our Christmas results show the effectiveness of our strategy of investing in good value, in making our shops attractive destinations and in building our online business."