UK Retailers expect sales decline in 2023
2023.01.12 07:05
UK Retailers expect sales decline in 2023
By Kristina Sobol
Budrigannews.com – Despite retailers’ warnings that they will tighten their belts in 2023, British shoppers spent freely at Christmas, filling their carts with party food, drinks, and clothing as they enjoyed the first holiday season without concerns about COVID in three years.
(OTC:) Tesco as well as Marks and Spencer (OTC:), Despite the worsening cost of living crisis, two of Britain’s largest retailers reported higher-than-anticipated Christmas sales as consumers sought out holiday treats.
Due to postal worker strikes providing an additional incentive to return to the High Street, in-store sales were particularly strong.
A similar trend was seen in Wednesday’s results from Sainsbury’s, a major supermarket. This dispelled retailers’ concerns that Christmas sales would be slow due to low consumer confidence and double-digit inflation in the UK.
The exception was fashion retailer ASOS (LON:), which sold only online. which, after a decade riding the wave of the shift to online shopping, has faltered following the pandemic. It stated on Thursday that UK sales were down 8% and revenues were down 3% in the four months prior to December 31.
This Christmas, ASOS experienced delivery issues, which demonstrated the importance of a physical presence.
With its sales during the four-week Christmas period, Marks & Spencer, which has approximately 1,000 stores in the UK, increased its market share and outperformed expectations, posting like-for-like growth of 6.3% in food sales and an 8.6% increase in clothing and home sales.
M&S reported a 12.8% increase in store sales, which were a strong point, and a 20% increase in click and collect orders, in which customers pick up online-ordered items in stores, as well.
In the six weeks to January 7, supermarket group Tesco, the nation’s largest retailer, reported underlying sales growth of 7.2%, which was also stronger than anticipated.
However, as the Christmas credit card bills begin to wreak havoc on British household budgets, both retailers issued warnings about challenging economic conditions to come.
Tesco CEO Ken Murphy told reporters, “We all would expect customers to tighten their belts after Christmas, and that’s certainly what we have built into the plan this year.”
Britain’s retail market is already noticing that consumers are cutting back outside of the Christmas food and gift spending spree. Due to lower demand for bicycle and tyres, Halfords, a British motoring and cycling parts retailer, reduced its profit forecast on Thursday.
Next and JD, both clothing retailers (NASDAQ:) Sainsbury’s, ranked second behind Tesco, reported a 5.9% increase in underlying sales for the Christmas quarter, and sports both reported strong festive sales over the past week.
