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Christmas trading 2011: results table – Wednesday (and final?) update

25th January 2012

WH Smith traditionally brings the Christmas results season to a close, and here they are, down 6% in the high streets and 3% at their Travel division.  Although this was accompanied by the usual statements about the entertainment categories (CD, DVD, now an infinitesimal part of Smith’s mix), and “resilience”, “challenge” and “cost controls” all made their usual appearances, there was little indicating retail progress.  Strong categories?  Kobo and online?  Former British Bookshops stores?  You can manage a business for cash for so long (and it’s been so long that it’s remarkable), but at some point you have to sell more product, to more customers, more often.  That’s what we want to hear from WHS, and it’s what’s missing again.

19th January 2012

I’ve been on the road for the past couple of days, and quite a few gaps in the table have been filled during that time.  Strong sales from Primark and Matalan indicate that there’s still a desire for value when it’s done well.  Of course, you might say the same about Peacocks, which by all accounts remained operationally profitable, but has been crippled by debt and forced into administration, threatening the biggest one-off loss of retail jobs since Woolworths in 2008.

The Centre for Retail Research in Nottingham has published a sobering schedule, detailing retail failures from 2010-2012.   They state that, over the five years 2007-2011, 173 retail businesses folded, comprising a breathtaking 18,342 stores, and over 150,000 jobs.  Questions please to the CRR –here’s the link.

Back to Christmas 2011, and at the other end of the fashion scale, Burberry and Mulberry have announced excellent growth, but it’s been unclear whether the numbers have referred specifically to UK retail, so I’ve omitted them.

No such qualms with not-retailers-at-all Greene King and JD Wetherspoon.  Looks as though we still have money to spend on a night at the pub!  And animals had a good Christmas, even if their owners cut back, with Pets at Home up 4.9%.

I posted a like-for-like book sales for Oxfam last week, and this has been followed by a flurry of other figures, reported in the Guardian.

Biggest news from the mid-week period has been from the electricals retailers, with Dixons (Currys/PCWorld) hailing -7.0% as a relative success, and Comet’s  -14.5% a reflection of the grim condition of a business struggling through a sale process, and pretty much disowned by Kesa.

However, I think there are good things to be said about Dixons, but they need a separate blog – watch this space…

16th January 2012

Just three additions today – Boots and The Perfume Shop, both looking good; and the McArthurGlen outlet centres, which appear to have had an exceptional season.  It’s worth bearing in mind that Christmas historically has peaked early at outlet “villages” like Swindon and Cheshire Oaks – outlet customers search out the best bargains early, and then complete their shopping in traditional malls and high streets – from memory, the final weekend in November was typically the best in the run-up to Christmas.

Who are we still waiting for?  Of those who made Christmas trading announcements last year: Electricals – Currys/PCWorld and Comet; books/media – WH Smith and Waterstones (though the latter is now privately owned, so is under no shareholder pressure to announce); fashion: Primark, Matalan; DIY: B&Q (though Christmas is hardly a prime season for them, it’d be good to benchmark their performance against Homebase and GCG).

Who would we like to hear from?  Big, successful private businesses like Arcadia and River Island; PE-owned growers like Pets at Home and Hobbycraft; discount grocers like Aldi and Lidl, and bargain retailers like Poundland; niche successes like Jack Wills and Cath Kidston; mega-brands like Selfridges…  It’s a long list, and any analysis of published numbers is inevitably just a snapshot of a sector which is far less plc-dominated than in the past.

13th January 2012

A quick final update before the weekend is upon us.  Has Tesco had enough press coverage?  As Twitter noted last night during News at Ten, you’d think they’d called in the administrators…  Still, Philip Clarke has been very candid about the challenges Tesco faces, and has been reminded (as The Times editorial today emphasises) that no company stays at the top forever.  I’m thinking hard about Tesco Extras, and a separate blog might follow…

Nils Pratley on The Trouble at Tesco

Harry Wallop on Is This the End of Tesco Dominance? (QTWTAIN)

Meanwhile…  Good numbers from Original Factory Shop, The Entertainer and Superdrug, but another tough season for Theo Fennell.  Nul points to Asda and Ted Baker for announcing total growth for Christmas, but not like-for-likes.  Of course, I appreciate they don’t have to announce anything at all, but if I had shares in Wal-Mart, I’d want to know what was what.

12th January 2012

After a positive start to the week, things have turned ugly with poor results from Tesco spooking the markets, and throwing fresh doubt over the sector.

As you can see from the table above, Tesco has performed significantly worse than other supermarkets (and M&S food, which has been broken out separately in reporting, and which saw a like-for-like increase of 3%).

House of Fraser has posted some remarkably good numbers, but it isn’t clear whether they’re inc or ex-VAT.  For the record, I’m a committed ex-VAT person – including a variable rate of tax in your sales is no way to accurately reflect like-for-like shopper behaviour.

(At Borders, 75%-80% of our sales were VAT-free – books, newspapers and magazines – and the remainder was VATted – stationery, CDs, DVDs, toys etc.  We also paid a “special rate” of VAT, where eg a CD-ROM was attached to a book on computing or language learning, which reflected the fact that part of the whole product was zero-rated.  I’d like to think that the HMRC officers required to create and police these rules, and audit the proceeds, cost rather more than the total tax take.)

Anyway, back to Christmas 2011, and as expected, times were tough at the likes of Halfords, Thorntons and Mothercare.  Argos had a particularly grim set of results – for how long will 750 stores be sustainable?

Some more variances to reporting periods, highlighted in green.  These were the reporting periods twelve months ago:

  • Tesco LY: 6 weeks to 8th January
  • JD Sports: 5 weeks to 1st January
  • New Look: 15 weeks to 8th January
  • House of Fraser: 5 weeks to 8th January

FTSE 100 retailers are now shown in bold.

10th January 2012

Plenty of results added to today’s table, including a couple of outriders that you may not have seen reported elsewhere!

Game takes over at the unhappy end of the chart; their LY numbers are highlighted because of a change in reporting period – for 2010, they reported five weeks to 8th January, this time around, an additional three weeks pre-Christmas were included.  The Co-op also made a change – the prior year numbers relate to a 13 week period, October – December.

There’s some inc-VAT (Debenhams) and ex-VAT (Majestic) differentiation, which given the rate jump from 17.5% to 20% has a bearing on different companies’ numbers.  And of course, these are just sales – not profits.  The rumbling undercurrent – “of course, their margins will have taken a hit” – accompanies many of these announcements.

Nevertheless, it’s great to see many more pluses than minuses on the schedule – long may it continue…

9th January 2012

And they’re off.

It looks as though this year, every media source and his dog is going to be publishing regular updates on Christmas trading, so I’ll keep this brief, and update it as required.

I’ve included last year’s numbers, where I have them – and as this is a busy office, I haven’t dug out LYs where I previously didn’t have them – I’ll try and infill if Edwin Drood becomes unwatchable.

Worth noting that, where comparisons exist, the order of companies is exactly the same as last year.  (The reporting periods are all similar, so these are good comparisons.)

It’s worth remembering that bad results always take longer to calculate than good ones…

And for the many hundreds of you who enjoyed my “8o towns” blog from last week, I’ve shown store numbers.  Counting stores is always an inexact art, but most of the chains are on multiples of eighty.  Some will stay that way – supermarkets, Next.  But there’s restructuring in the air.

Just to keep us all honest, this article from the Telegraph highlights some of the more imaginative ways that Christmas performance can be characterised.

And, lest we forget, the following chains probably won’t be providing Christmas trading updates:

Barratts Priceless, Blacks, D2 Jeans, Hawkins Bazaar/Tobar, La Senza, and Past Times.  Ask not for whom the bell tolls, but let’s hope stores can be rescued, and jobs maintained.

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Foraging in the charity shops

Here in my agreeable outer-London suburb, we’re pretty lucky.  We have good schools, plenty of public transport links, trees and open spaces, and a Carnegie library.  Oh, and no fewer than nine bookshops.  Life is good – but I should qualify that last statement.

Of our nine bookshops, one is a “proper” bookshop, with a tight but comprehensive range, trained and pleasant staff, book tokens, 48 hour ordering and all those good bookshop things.  It has a big W over the door, and its future prospects are interesting, if not necessarily secure.

Another one is more of a stationers-cum-newsagents – it also has a big W over the door, though the loud royal blue fascia suggests a more mid-market positioning than the specialist shop.

That leaves seven more bookshops, some concentrating on books, others extending into fashion, homewares and indeed anything that might have fallen out of your loft.  They are, of course, charity shops, and my neighbours and I can support cancer research, hospice care, the developing world, and children’s causes, through a variety of outlets.

Since I stopped buying all my books at Borders, I’ve found that I tend to split my book-buying between Waterstone’s and the West End specialists, where I typically pay full price, and charity shops, where I typically pay about £1.50.  This means that my average cost per title is similar to the Amazon or supermarket shopper, at around £5 a time.

Full-line retailers feel ambivalent at best about charity shops.  On the one hand, one wants to support charitable donation, and all of the good causes on my high street are legitimate and worthwhile.  On the other hand, the charity shops’ economic model – exempt from corporation tax, exempt from charging VAT on sales, and with 80% relief on business rates, plus stock donated at no cost, plus a staffing model based on volunteering – can make the most socially aware retailer turn a little green.  These concessions have enabled charity shops to prosper where commercial shops have failed; we have fewer building societies cluttering up high streets than we used to, and coffee shop penetration appears to have topped out, but charity shops keep on coming.

A few years ago, booksellers started to get exercised about charity shops, selling the same books as the specialist for 20% of the cover price; in retrospect, this was angst over the two-foot wave that destroys your sandcastle, and takes your eye off the tsunamis that are rolling in from Seattle, Cupertino and Cheshunt.  And when times are hard, and the environment is fragile, and good causes deserve our support, there is little criticise in charity shop patronage or expansion.

In the meantime, the internet has pretty much wiped out traditional second-hand bookselling.  Whereas every provincial town used to have a Second-Hand & Antiquarian Bookseller tucked away in a back street on five rickety floors, selling a mixture of collectors’ books and general tat, the growth of online resellers – primarily eBay, and AbeBooks, now owned by Amazon – created an instant global market for old books.  The thrill of the chase disappeared overnight – if I want to buy a copy of an old collectible, I no longer have to spend years foraging in divers stacks – I can log on, place my order and sit back and wait for the package from Albuquerque or Ipswich to arrive.  And easier access has driven down prices, so those autographed editions I thought might look after me in retirement are now ten-a-penny.

This has indirectly benefitted the charity shops, so that few of us now regard our surplus books or LPs as serious earners – they’re another hindrance, and down to the charity shop they go.  And book-lovers have become expert assessors of charity shop stock – I know that there’ll be plenty of copies of One Day, or Room, or South Riding available down there in a couple of months, and I can start planning next year’s summer reading now.  In the meantime, I could build a substantial shed out of the Clarksons, Peter Kays and Parkys available from my seven local charity shops.

The charity shop purchase often feels like a loan from Mudie’s or Boots Lending Library.  I’ll buy some dumb, stupid title from the London Review Bookshop and keep it for years, to justify my extravagance; whereas I’ll buy, read, enjoy and recycle a charity shop book.  If I want to read it again one day, I’ll just fork out anouther £1.50.

I have some broader thoughts about charity retail, which I’ll save up for another post, but in the meantime, one last observation.  I’m a book-lover, and bookshop lover.  My travels in the average week probably bring me into the ambit of about eight different branches of Waterstone’s; however, I’ll only visit one – I only need to visit one, and I’ll be up to date with what’s new, and what’s on promotion.

But charity shops are always worth a punt.  I’m agnostic about the good cause at any one shop – like most of us, I have charities I support, but this is about books, about commerce.  I’ll try any charity shop – although there  is a Guardian-y something about Oxfam that tends to attract the better books, and which has enabled them to focus harder on books than alternative charity retailer.

Generally, there’s a purity to the charity experience – the shop offer is defined by stockholding alone.  Customer service will be pleasant, but unlikely to be specialist, and the environment can be beaten up and a little whiffy.  What the customer gets is what chain stores deny – the thrill of the unknown, the possibility of The Unexpected Find.

If Waterstone’s could reintroduce a the element of surprise and delight, so that they offered more than a reliable experience to the shopper, where might that take them in the future?  The bookshop as treasure-trove, as inspiration, the bookshop that leads you in unexpected directions.  Good bookshops have always done this over the years.  At the moment, the random pleasures of Oxfam can be more rewarding than the considered range of Waterstone’s.  That’s an opportunity, I think.

Photo: net_efekt on Flickr