Thank you, January, and goodbye

Cold, bitter January is over – February will bring us snowdrops, Valentine’s Day and longer evenings.

But it’s unlikely to bring any resurgence in consumer confidence – that will have to wait until the budget (at best) on 23rd March, now being hastily repromoted as a budget for growth, rather than austerity.

I thought it would be useful to draw together the retailers’ Christmas trading statements into a handy spreadsheet, although – as ever – they pose as many questions as they answer.

Click on this link for a table, sorted by like-for-likes:  Christmas results 2010.  Where the distinction exists, all numbers refer to UK or UK/Ireland only.  Any errors and omissions are mine alone – if you point them out, I’ll correct them.

HMV announced first, and announced worst – and, of course, companies who had lowered profit expectations were duty-bound to announce quickly.  But HMV has carried the opprobrium, the company that tanked at Christmas, despite the recovery at Waterstone’s, and the fact that the business remains profitable and cash-generative, for the time being.  We’ll return to HMV on another day.

Back to the table.  WH Smith, as ever, announced late and gave us a Christmas of which 50% took place after 25th December.  Their high street like-for-likes of -7% were barely commented on, despite being third worst on the table – another tight squeeze on costs and margins, and we’re promised a further increase in profitability.  Given all we know about books, news/magazines and Basildon Bond, how long is this sustainable?  There’s no reason to doubt Travel as a long-term bet, but High Street looks challenging.

There is no consistency in the periods covered by these results – I give much more credibility to “month of December” than any other configuration, as it pulls in most of the sales surge, acknowledges the bad weather, and (critically) also reflects the first week of the post-Christmas Sales.

There are plenty of names missing from the list.  Family-owned businesses (which includes some big fashion chains) don’t have outside investors to pacify.  Companies in overseas ownership are unlikely to have their UK performance split out, unless there’s a particularly good story to tell.   And pure-play online retailers appear to be keeping mum – with the exception of Ocado, which as a recently-floated plc needs to say something, and has something good to say.

Talking of online sales, the trend of splitting out a traditional retailer’s online sales in order to boast about their triple-digit growth appear to have passed.  I suppose that if those results are disappointing, a company won’t want to draw attention to them; whereas if they’re good, they’ll probably cast the bricks-and-mortar division into a poor light.

Finally, it’s worth remembering that there is no statutory requirement for retailers to report Christmas in isolation; no strict definition of what constitutes “like-for-like” sales, and that higher sales are no guarantee of higher profitability.  And I’d certainly be looking for more than like-for-likes to justify any investment decisions.

Oh, and I’m guessing most of you will just have been paid.  Please get yourselves down to the shops and give the economy a boost!


Since this post was published, further results have been published by JJB Sports and Carpetright.

This has affected the commentary above, but it can stand as having being accurate on the morning of 1st February.  The attachment, however, has been amended to include JJB/Carpetright, and I’ll amend it further if more companies make announcements.