Tesco adds to festive cheer on High Street but Asos and Halfords lose out
>
Tesco adds to festive mood in High Street as sales rise 7.2% but Asos and Halfords lose
Tesco boss Ken Murphy said shoppers are ‘cautiously optimistic’ about 2023 as it celebrated a great Christmas.
The UK’s largest grocer said sales were up 7.2 percent in the six weeks to January 7.
Marks and Spencer also toasted a successful Christmas as shoppers brushed off the economic gloom.
Sales up: Tesco, the UK’s largest grocer, is having a great Christmas as sales are up 7.2% in the six weeks to January 7
The pair are the latest to report stellar festive numbers, following the likes of Next, Sainsbury’s, JD Sports, Aldi and Lidl.
AJ Bell investment director Russ Mold said, “It feels like retailers are doing better than feared, with some notable exceptions.”
UK grocers were boosted by families celebrating their first restriction-free Christmas since the pandemic hit.
And fashion companies such as Next, JD and Primark benefited from a drop in online shopping as customers flocked back to the stores. But in a sign that some companies lost, some retailers revealed falling sales.
Fast fashion company Asos saw its turnover fall by 3 percent in the last four months of 2022. Despite this, shares rose 20.9 percent, or 122.5 pence, to 708.5 pence as investors hoped for a turnaround.
N Brown, the online retailer behind Simply Be and JD Williams, saw sales fall 7.6 percent in the last quarter of 2022.
And online wine merchant Virgin Wines posted a profit warning after what boss Jay Wright called a “disappointing” end to the year. Shares crashed 24.1 percent, or 17.5 pence, to 55 pence.
Halfords crashed 18.7 per cent after a shortage of mechanics and weak tire demand hit car centers, while bike sales remained subdued.
Shore Capital retail analyst Clive Black said, “There will be losers.” He added: ‘When it comes to Christmas in the UK, people have been much more careful about how they spend money.
But on that basis, they haven’t been together for three years, so in terms of the retail spending cake, the supermarkets are the big winners. The money that the people had available, they decided to eat and drink.
“Online has really suffered and the pure-play online retailers have been exposed.” Tesco said it was taking shoppers away from its traditional rivals, leading to losses as some customers switched to Aldi and Lidl.
It was engaged in a fierce price war with Germany’s discounters and said it was offering its “most competitive” offering, with more than 600 products being part of its Aldi price comparison campaign.
The supermarket, which owns a massive 27.5 per cent of the sector, said it would meet its target, with profits for the year to mid-April of between £2.4bn and £2.5bn.
tesco shares rose 0.9 percent, or 2.3p, to 246p. Boss Murphy said: “As for the trends for 2023, we see customers expressing feelings of cautious optimism.
“Customers are weathering the storm. We’re in a full labor market. I think it makes sense that the recession might be a bit shallower than people might have thought, so there’s a little bit of cautious optimism.”
Sales is also Rosie at M&S
Hit collection: M&S teams up with supermodel Rosie Huntington-Whiteley
Marks & Spencer reported strong Christmas trading as shoppers picked up their food and market share in clothing and home rose to a seven-year high.
The retailer said food sales rose 10.2 percent in the last three months of the year, marking a second consecutive year of record sales.
It came as shoppers flocked to the stores to stock up for family celebrations after three Christmases ravaged by Covid.
And after years of struggling with declining sales in its apparel and home division, it has captured its largest market share since 2015.
The retailer, who works with supermodel Rosie Huntington-Whiteley, feared shoppers would cut back on new outfits and home goods, with sales up 8.8 percent from a year earlier.
M&S said it saw a “particularly strong” performance in menswear, with formal wear sales up 40 percent.
Party wear also flew out of the store, with sales doubling. Boss Stuart Machin said: ‘More customers shopped with M&S over Christmas than in years past.
This outperformance was due to M&S doing what it does best; exceptional product at a value you can trust.”
It doubled its profit forecast of around £500m for the year to April.
Shares rose 1.3 percent, or 1.9 pence, to 145.3 pence, as it warned of “clear macroeconomic headwinds and underlying cost pressures.”
Interactive Investor’s head of investment, Victoria Scholar, said: ‘After a rough year, M&S is picking up recently, with an increase of more than 20 percent in the last month.’