Tesco comes out top in festive retail battle

Tesco reported a 2.2 per cent rise in UK like-for-like sales in the six weeks to January 5, outperforming the wider market
Tesco reported a 2.2 per cent rise in UK like-for-like sales in the six weeks to January 5, outperforming the wider market
0
Have your say

​Tesco ​has ​emerged as a festive ​retail ​winner after unveiling a strong set of Christmas trading figures​, whilst Marks & Spencer reported a downturn in sales and John Lewis warned that profits ​will​ be "substantially​"​ lower​ ​this year​.​

Tesco, Britain's biggest retailer, ​reported a 2.2​ per cent​ rise in UK like-for-like sales in the six weeks to January 5, outperforming the wider market in all key categories - food, clothing and general merchandise.

Tesco said that its "Festive 5" Christmas vegetable offer proved particularly popular with customers, selling 19.7 million units over the three weeks to Christmas.​ ​Promotions on lamb and beef joints also helped drive sales.

Over the 19 weeks to January 5, the supermarket sa​id​ like-for-like sales ​rose​ 1.2​ per cent​ in the UK.

Chief executive Dave Lewis said: "As a team we have achieved a lot in the last 19 weeks. In the UK we delivered significant improvements in our competitive offer and this is reflected in a very strong Christmas performance which was ahead of the market."

The results come amid a difficult time for the retail sector, as consumer confidence takes a knock from Brexit worries.

Supermarkets are battling rising costs and fierce competition in the sector as Lidl and Aldi continue their relentless march.

Mr Lewis added: "We have more to do everywhere, but remain bang on track to deliver our plans for the year - and as we enter our centenary, we are in a strong position."

Tesco's update is the latest from the ​big ​f​our supermarkets, which also includes Sainsbury's, Asda and Morrisons.

Morrisons reported strong figures on Tuesday, while Sainsbury's, which ​hopes to merge with Asda, posted a ​lower set of results on Wednesday.

Marks & Spencer ​said it is seeing "encouraging early signs" despite further falls in clothing and food sales over its Christmas quarter.

The retail bellwether said like-for-like clothing and home sales ​fell 2.4​ per cent​ over the 13 weeks to December 29 while comparable food sales fell 2.1​ per cent​.

Total clothing and home sales fell by 4.8​ per cent​ ​following a raft of store closures.

The group said while unusually warm weather and falling consumer confidence made for a "very challenging" November, overall trading in its third quarter was "steady with some early encouraging signs".

M&S ​confirmed is it on track for its full-year profit guidance.

Chief executive Steve Rowe said: "Against the backdrop of well-publicised difficult market conditions, our performance remained steady across the period.

"Our food business traded successfully over Christmas as customers responded to improved value.

"Our transformation programme remains on track."

The group said it did not take part in Black Friday discounts and held off from discounting ahead of Christmas, despite heavy promotional activity across the high street.

Mr Rowe said he did not regret the decision, which meant it went into the post-Christmas sales with around 25​ per cent​ less stock - its smallest sale for five years.

He added that the group saw a late sales surge, due to the extra weekend before Christmas.

The John Lewis Partnership warned that its annual staff bonus is under threat as it battles challenging trading conditions.

Around 83,000 staff are usually awarded the payout in March, but the retailer said on Thursday that it expects​​ profits to be "substantially lower" this year amid slower sales growth.

Chairman Sir Charlie Mayfield said: "The board will need to consider carefully in March, following the usual process, whether payment of a bonus is prudent in the light of business and economic prospects at that time."

The announcement came alongside the firm's Christmas trading update, which saw the department store chain book like-for-like sales growth of ​1 per cent in the seven weeks to January 5.

While fashion, beauty and womenswear performed well, the firm said profit margins remain under pressure in what is an "intensely competitive pricing environment".

Comparable sales at sister chain Waitrose rose ​0.3 per cent​ following a sharp reduction in the level of promotions.

​Sir Charlie said: ​"We continue to expect full year total Partnership profits to be substantially lower this year, driven by slower sales growth over the year and margin pressure in John Lewis & Partners along with higher costs, mainly as a result of our continued investment in our IT capability​."