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John Lewis sees Christmas slump while M&S posts “improved” seasonal sales

A number of the UK’s high street’s stalwarts released Christmas trading statements today (9 January), with the John Lewis Partnership announcing a drop in sales of 1.8% compared to last year. Sales for the seven weeks to 4 January 2020 at both John Lewis and Waitrose were down 2% and 0.4% on a like-for-like basis respectively. Meanwhile, online sales increased, with Waitrose reporting online grocery orders up 23.4% in the seven days to Christmas.

The results come three months after the high street darling announced a shake-up of the business which saw John Lewis & Partners and Waitrose & Partners managed and operated as a single business.

John Lewis Partnership boss, Charlie Mayfield, said the retailer saw demand increase around Black Friday, but sales were more subdued in December. The retailer also announced the departure of MD Paula Nickolds who will leave the business next month.  

Anusha Couttigane, principal fashion analyst at Kantar, said the future of the John Lewis Partnership “remains uncertain”.

“The departure of Ms. Nickolds follows the resignation of Waitrose MD Rob Collins in October last year. While once upon a time the business was managed through three separate executive boards, this is now being merged into a single executive leadership team,” explained Couttigane. “The exit of JLP lifers and a disappointing Christmas performance mean that the partnership may neglect to pay out its infamous staff bonus for the first time in 67 years. Last year, it paid out just 3%, down from an enviable 18% in 2011.”

She added: “Additionally, John Lewis needs to continue evolving its digital marketing efforts. While the company’s Christmas mascot, the accident-prone dragon Excitable Edgar, was warmly received, the debut of the brand’s Christmas advert is simply not the event it once was. In the digital age of streaming and on-the-go entertainment, gone are the days of a prime-time TV debut going viral (historically during Downton Abbey or some other national favourite). The retailer needs to ensure it is positioning itself to reach its biggest opportunity customers through the right channels.”

Over at M&S

Meanwhile, M&S reported “improved trading performance reflecting progress of transformation strategy”, with a 0.2% increase in UK sales on a like-for-like basis for the 13 weeks to December 28.

But the city was not as impressed, and M&S shares fell 7.5% after the announcement as poor trading in clothing and home (-1.7%) worried investors. Food, on the other hand, increased by a respectable 1.4%.

CEO Steve Rowe blamed “disappointing one-off issues” with waste and supply chain in the food business and menswear and gifting in clothing and home.

Commenting on the M&S results, Couttigane acknowledged the retailer’s “ongoing struggles” in fashion: “With former F&F director Richard Price set to take the helm of clothing & home, he will have his work cut out for him, not least in the company’s online performance, where social commerce is becoming more and more important to unlocking conversion.”

The results come as the BRC revealed 2019 was the worst year on record, as total sales for 2019 fell by 0.1%, compared with growth of 1.2% in 2018.

It was more positive news for Tesco this morning, which reported a 0.1% rise in UK sales. Meanwhile, Boots also reported a decline last night when its US parent company Walgreens Boots Alliance revealed a 1.6% drop in sales across the group, while international sales also slumped.