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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.”