According to the OC&C Christmas Trading Index, retail sales over the holiday period grew by 2.1% - better than some had forecast but still just half the increase recorded the previous year. John Lewis and House of Fraser were unquestionably big winners, Sainsbury’s and Waitrose prospered, Tesco had its worst season for more than a decade, and the leading electrical players – Dixons, Comet and Argos – all saw sales fall year-on-year.

Contrast

At John Lewis over the five weeks to 1 January, sales of ‘electricals and home technology’ increased by 14%, compared with 9% across all product groups. Like-for-likes will have been a point or so lower. But a couple of negative weeks at the end of January took the edge off an excellent half-year (to 29 January) where total sales increased by 10%, with electrics up the same. Online sales grew by 38%.

In contrast, Dixons Retail in the twelve weeks to 8 January saw like-for-likes in the UK and Ireland fall by 4% but believed that in a tough market peak trading had been “solid”. However, the snow hit sales by about £20 million, stock shortages at warehouses created problems with home deliveries and an “embarrassing” technical problem, that caused websites to crash during the first days of its sale, cost an estimated £15 million of business.

As a result, full year profit before tax will now be at the lower end of current expectations – so between £100 million and £110 million – with the group “remaining cautious about the economic outlook across its markets”.

Disruption

Comet fared even worse with like-for-likes down by over 7% for the eleven weeks to 18 January, despite trading at record levels from Boxing Day to the New Year weekend. Gross margins were down, reflecting the “highly promotional nature of the market over the period”. Web-generated sales grew by only 3%, as it too endured some disruption from a new software platform. Comet is cutting costs, including the closure of 14 service centres, to see it through “very challenging trading conditions” and now expects to deliver a small retail loss for the year.

In the four months to 1 January, like-for-likes at Argos fell by 5%. Video games continued to be difficult and televisions were also down against last year. Laptops and tablets did well, and sales of white goods continued to grow. The internet represented 38% of Argos sales, three-quarters of which came from online reservations.

Tesco reported a 1.5% decline in its non-food division, which includes clothing, electricals and homewares. In electricals it blamed limited access to the latest Apple products. At the Co-op, its wide-ranging non-food activity increased by 12% in the final quarter, with electrics getting a special mention as it looks to introduce more stores-within-stores this year. Rent-to-own specialist BrightHouse lived up to its name with sales up by 10% in the fourth quarter, but cautioned that trading has since been “slow”.

Deep pockets

At Best Buy a number of top-level resignations and it pulling out of a major property deal in the North East have fuelled speculation about its future plans for the UK. But Carphone Warehouse chief executive Roger Taylor has restated his confidence in the venture, and flagged a “strong performance” from the recently launched transactional website. He confirmed the store roll-out programme would continue: “The performance of our first six big-box stores in their launch year has reaffirmed our belief in the substantial opportunity that exists within the consumer electronics market for our innovative, deep-service based proposition.” They will however for the time being concentrate store development in the South East, Midlands and South West.

New Best Buy Europe chief executive Andrew Harrison declined to give a break-even target for the business, preferring to think of its projected losses – £100 million or so in the first two years – as ‘investment’ in the future.

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