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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Westfield Ho! Visiting Stratford City, Part Two

Welcome back to the second part of the Front of Store Westfield tour…

Sticking with the Lower Ground Floor, we emerged from the phone shops into a world of children’s specialists.  Build-a-Bear, Lego and upscale clothes stores like Polarn O Pyret and Atelier de Courcelles are already in evidence; Mamas & Papas will follow on a higher level.  (Observation: upmarket children’s stores have foreign names.  JoJo Maman Bébé would be another.  Whereas the mass market has clunkier, English names.)

So, The Entertainer.  The six-day toyshop is a staple in many shopping centres, and this was a pretty standard store – reasonably fully stocked, but many popular brands had been allocated limited space or were unstocked, and generic product took their place.  Putting all the rollerblades in “Boys Toys”, including the pink ones, summed up a rather formulaic experience; staff stayed firmly behind the tills (including those wearing “can I help you?” sashes), which rather defeats the experiential joy of a good toyshop.  We left, feeling a bit flat, and crossed the mall to Mothercare.  Here, shopfit quality has been lifted (attractive light woods and pastels), and roomsets show off nursery furniture to advantage, but again, there were no staff on the sales floor.  The customer may have sought assistance with car seats or buggies, or wanted some show-and-tell in the curiously unbranded Early Learning section at the rear, but all staff were again coralled behind the tills.

Retailing isn’t easy at the moment (you may have noticed), but it does seem curious to under-staff your most important new stores within a week of opening.  If you can’t throw some payroll hours at converting new customers to your brand, and you don’t have a high-concept store design or radical new products, how are you going to get your store to stand out from 300 others at Westfield?

Pausing to admire the publishers’ pack-shots on the Foyles hoarding (opening next month), we headed into one of Westfield’s biggest draws, the John Lewis store.  And our initial impressions were… oh dear.  This has all gone badly wrong.

The Partnership has built a large store that feels small.  Perhaps the escalator cut-out is too big, but where M&S is spacious, JLP is cramped and tight, particularly on Lower Ground, where the juxtaposition of menswear to the right and kitchenware to the left feels absurd.  The shopfloor has been segmented using fretworked screens and other devices which only serve to further cramp the feel of the place – the aisles are tight, and the product juxtapositions frankly bizarre.  And the severed hands hanging from the ceiling are downright creepy.

Things improve on what Westfield calls the Ground Floor, and JLP calls First (women’s fashion, accessories and beauty), and things are as they should be here and on First/Second (furnishings and fabrics).  The top floor is strong, with the best toy offer we’d seen all day – at last, someone carrying all the brands, facing the plush towards the customer, and keeping the offer clear.  But the top floor also contains a big fat compromise of a space, which may explain why the bottom floor is such a dogs’ dinner.  A huge London 2012 shop sells every imaginable take on Olympic mascots and logos, complete with a viewing gallery offering a sensational panorama of the Olympic park.  This must take up over a quarter of the total retail space on the floor, so you have to conclude that several categories will exit the lowest level and move to the top in due course – but not until autumn 2012.

An aside – isn’t it about time we stopped treating the 1960s as the pinnacle of British grooviness?  Routemaster buses, Concordes and original Minis barely exist in modern London, and are surely irrelevant to our image of a 21st century cosmopolitan capital city.  At least red phones boxes and beefeaters still exist, but we need better, more modern icons.

Back to the shops, but before we leave John Lewis (after a reliable lunch at The Place To Eat) I should note that customer service was as exemplary as ever.  There’s nothing unfixable about this store, but it wasn’t delivering the experience we’d come to expect.

What makes John Lewis more profoundly disappointing is the quality of Marks & Spencer.  M&S has created a proper department store in a free-standing building that provides a sense of occasion on every level.  I haven’t seen the prototype fit at Kensington High Street, but this was a classy, well laid-out and very shoppable offer.  Menswear (complete with a tailor running up alterations, and much clearer definition for brands like Blue Harbour) was simply the best I’ve ever seen in an M&S; home and furnishing were strong, and a delightful top-floor cafe offered treats that the customer could also buy from the Foodhall.  I’ve written recently about the challenging legacy of old stores that M&S has to deal with; by contrast, in a brand new space, they are creating some of the best retailing in the UK.

Clinton’s has made a bold attempt to update its image.  The orange and purple trialled in St Albans is much in evidence, but some of the shopfitting was cheap, and the juxtaposition between a funkier feel and some of the granny-targeted merchandise was jarring.  Service was excellent, though; Clinton has too many shops, many of them desperately old and tired, but there’s a place afor a mid-market gift/card chain, and one hopes that the new management team can move the business forward.

Timothy Melgund at Paperchase has often asserted he runs a fashion brand, rather than a stationery shop, and the new store is on the prime fashion pitch, beautifully presented and ideally sized.  Cards can be generic things, and Clinton/Scribbler/WHS are subject to constant price comparisons with the supermarkets; Paperchase overlays some quality and product uniqueness, and lifts itself well clear of the fray.

A few years ago, a vast HMV would have taken dominant space in a new mall like Westfield.  Not any more – a smaller unit on a side aisle has to suffice.  The CD/DVD offer is what it is, slowly and inexorably declining (though it doesn’t look as though anyone has told the buyers – stock density is extreme); games appear to have been circumscribed, and the technology offer – pitched to save the business – hasn’t noticeably moved on from the Islington protoptype.  This was very disappointing; Apple, Currys/PC World Black, and the upper end phone stores were displaying better tech on better fixtures, with dangly cables under control, and staff to explain and sell.  HMV offers MP3 players, boomboxes (archaic term, sorry) and accessories, but it’s hard to see for whom this store would be first choice for this product.  Execution of these ranges will have to be more stimulating if they’re to offer any real hope to HMV.

Next time I visit Westfield, I look forward to seeing more stores trading – there are still a lot of “under constructions” and “to-be-lets”.  I’ll rope in a teenage daughter and we’ll take a proper look at fashion.  However, I also wanted to understand where the customers were coming from.  Great play has been made of Stratford’s connectedness – two tube lines, Overground, DLR, national rail and direct links to the Continent, plus an adjacent bus station.  You can reach Westfield directly from any of these, but plenty of people are entering on foot from “old” Stratford.

Old Stratford compares very badly to Westfield and the Olympic Park, reminding the visitor of how deprived parts of our capital can be.  A one-way system encircles the old Stratford shopping centre, so that most foot traffic passes through a dingy mall and across knackered highways to reach Westfield.  Display boards promote upcoming public realm improvements (clouds on sticks!), but it is hard to see how this sort of surface flim-flam can improve the residential and commercial environment.

Stratford’s old mall is big, dating back to 1970s planning models that brought whole town centres under one roof (think Camberley, Eastleigh).  The interior is dark and crowded, stinks of cheap disinfectant, and is full of the crowds you can see on the bridge above, pushing their way through and past the old shopping experience and on to Westfield.

Massive regeneration will surely help the area, creating jobs and housing.  A masterplan was signed off by Newham Council at the end of last year – just five years after the successful Olympic bid.  Serious thought needs to be given to local shopping provision – presumably the duplicate chains in the old scheme will be seeking to exit, leaving market stalls and pound shops behind them.  A decent, modern supermarket would be a good start, but at present, the contrast between Westfield and its immediate surroundings is too stark.  The number of shoppers in Westfield suggests long-term success (though, as I indicated in Part One, the Olympics need to come and go before retailers will have an objective picture of their performance).  To the south, Canary Wharf’s wealth has largely failed to trickle out to its immediate surroundings, beyond the gated apartments and highways.  A scheme like Bluewater – turn left off the M25 and head for the quarry – has little integration with Dartford and Gravesend.  Westfield and Stratford City, on the other hand, are in the heart of the deprived East End, and can – must – do better.

Photos:  Telegraph, Design Week, Mail/Getty