Christmas 2014 – An interim report

Mintel will publish an in depth report on Christmas 2014 in February, based on bespoke consumer research, company announcements and published retail sales estimates. But here we can take stock of the figures published to date and look at the main lessons.

Interim conclusions

  • Demand held up. It wasn’t a great Christmas, but retailers should be happy with the progress made overall.

  • Black Friday was a significantly negative factor. It pulled sales forward into November at a considerable cost to margins.

  • Food retailers had a better month, though the longer term trends are still very much in place.

  • Department stores and some specialists were the winners in non-foods and those who held their nerve and didn’t undermine their own pricing integrity by discounting outperformed those who did.

Retail sales growth

So far we only have the BRC data – up 1.0% in total and down 0.4% on a like-for-like basis. The BRC blames sales brought forward into November by Black Friday promotions, but food retailers had a better month and so did clothing after the very warm Autumn had hit sales.

There have been differing views of Black Friday, but John Lewis’ was the most interesting – clearly suggesting that in profits terms it had been, at best, neutral.

Food retailers

We have data in from all of the leading food retailers, apart from Asda, Aldi and Lidl.

  • There was a return to the superstores over Christmas, presumably for the main Christmas shop and for present buying.

Figure 1: Leading food retailers Christmas trading performance, 2014
Company Period Lfl sales growth (ex fuel)
Waitrose 30 Nov - 3 Jan 2.8
M&S (food) 13 weeks to 27 Dec 0.1
Sainsbury’s 28 Sep - 3 Jan -2.1
Tesco (Xmas) 23 Nov - 3 Jan -0.3
Morrisons 23 Nov - 3 Jan -3.1

The biggest surprise came from Tesco where sales over the Christmas period fell by just 0.5%. Far from being one of the worst performers, it may even have been the best of the big 4, though as the data is not directly comparable it is hard to tell.

It looks as if Tesco’s investment in higher service levels over Christmas has paid off and if that is the case then a turnaround at the business should be easier to effect than originally thought. But it would be wrong to read too much into such a short period and it does look as if people who have been shopping less at superstores went back for their big Christmas shop and for present buying.

Kantar data indicates that Aldi and Lidl continued to perform very strongly, though Asda’s figures appear to have been disappointing.

The best performers were Waitrose and M&S, the only ones to achieve like-for-like sales growth (apart, of course, from Aldi and Lidl, for which we only have the report from Kantar). Waitrose was the stronger of the two and we wonder if the poor performance in General Merchandise at M&S pulled down its food business.

The underlying trends in food retailing were still in evidence – C-stores and online grew, superstores declined.

Clothing retailers and department stores

Next had gone out of its way to dampen down expectations after last year’s exceptional performance and it succeeded to the extent that the market was pleased with a relatively low figure. We still find it hard to judge quite how good a performance it was, but it was definitely not bad.

M&S stands out as the worst performer. Its loss of market share accelerated and that cannot all have been down to problems online. The company discounted heavily in the run up to Christmas and yet still managed to report an increase in gross margin.

It would have been unreasonable to expect John Lewis to match the performance of the last couple of years, but given that the comparative figures were so strong, this was also an impressive performance. House of Fraser produced a better figure confirming that the recovery is well founded and is continuing. The pleasant surprise was from Debenhams which produced a good result in spite of pulling away from discounting so much. In fact restoring its pricing integrity has been highly successful.

Figure 2: Leading non-food retailers Christmas trading performance, 2014
Dates covered Like-for-like
Next Plc 28 Oct - 24 Dec 2.9*
John Lewis 23 Nov - 27 Dec 4.8
House of Fraser 23 Nov - 3 Jan 8.0
Boohoo 1 Sep - 31 Dec 25.0*
M&S GM 13 weeks to 27 Dec -5.8
Ted Baker (Group) 9 Nov - 3 Jan 22.8
Matalan 30 Nov - 3 Jan -1.7*
: : :
: : :
* total

** group: AO includes wholesaling; Primark includes international


The online bubble may not have burst, but it certainly seems to have developed a slow puncture. Boohoo had to issue a profits warning. Its performance hadn’t been bad but 25% growth in sales was not enough to satisfy the inflated expectations of earlier in the year.

If there is one clear message of the consumer research we have carried out for the report on Christmas trading due to be published in February, it is that it is becoming increasingly artificial to make any distinction between online and in-store purchases. It is the same people doing it. Shopping online is just one of the repertoire of ways of shopping that are now open to people and they choose the one that suits them best at the time.

And online growth is slowing – according to the BRC it was up just 7% over Christmas.

Winners and losers

Perhaps picking winners and losers is a little invidious. So we’ll stick with companies that produced pleasant surprises or disappointed.

Pleasant surprises:

  • House of Fraser – better even than recent figures would have led us to expect

  • Debenhams – the rewards for good retail disciplines

  • Specialists with a clear identity – Ted Baker, Supergroup, Joules, Pretty Green, Radley, among others

  • Tesco – a remarkable turnaround after the recent results


  • Matalan – has it really proved that it offers enough to justify a position as a destination, out-of-town store.

  • Argos – should have managed more than just 0.1% up.

  • Marks & Spencer – a significant worsening in performance in clothing and disappointing figures from food.

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