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Sunday Retail News Roundup

Tesco sales tidings of joy, Aldi and Lidl lose Christmas battle, High street trounced by Online, Tesco staff free fruit and veg, Sports Direct may sell Lonsdale and Donnay, BHS banking bonus bonanza, Dunelm hires George at Asda star, Morrisons and Marks & Spencer unlikely winners, Furniture payday, Next gloomy Christmas.


Sunday Retail News Roundup

Tesco sales tidings of joy, Aldi and Lidl lose Christmas battle, High street trounced by Online, Tesco staff free fruit and veg, Sports Direct may sell Lonsdale and Donnay, BHS banking bonus bonanza, Dunelm hires George at Asda star, Morrisons and Marks & Spencer unlikely winners, Furniture payday, Next gloomy Christmas.

Sunday Times.

Tesco and Morrisons are expected to produce robust Christmas trading performances this week as rampant growth of the German discounters Aldi and Lidl is checked. Sales at Tesco, the biggest supermarket with a market share of more than 28%, are forecast to have risen by up to 1% over the festive period. Lidl’s German parent company, Schwarz Group, has been concerned that its British stores were drifting too far from the spartan discount format. Marks & Spencer is forecast to have generated a modest rise of 0.2% in clothing and home sales, alongside a 0.4% drop in its food and drink division.

Tables were turned on German discounters Aldi and Lidl at Christmas as shoppers tired of their crowded car parks and long queues. The cut-price retailers have been snatching increasing market share from the supermarkets since the 2008 financial crisis, luring in the budget-conscious and the affluent. Sales at Aldi’s existing shops were flat over the Christmas trading period and sales at Lidl’s had fallen by up to 4%. Aldi and Lidl have each doubled their market share since 2008. On 6.2%, Aldi is ahead of Waitrose. Lidl has a 4.6% market share, placing it above Iceland. Together, Aldi and Lidl have more than 1,200 shops and they each plan to keep opening another 60 or 70 a year despite the slowdown in trading at their established shops.

Mail on Sunday.

Soaring demand at some of Britain’s fastest-growing online businesses is piling further pressure on the high street, figures from major retailers will show this week. The performance of fashion giants Asos and Boohoo is casting a shadow over the popularity of former shopping staples including Marks & Spencer and Debenhams which are struggling to increase sales in an increasingly competitive market. Growth at Boohoo is expected to exceed 40 per cent in the four months to the end of December and at Asos to rise 30 per cent as demand rockets at home and abroad. At current growth rate Asos could end its financial year in August with close to £2billion in sales and Boohoo is expected to exceed sales of £250million this year. Boohoo joint chief executive Mahmud Kamani aims to build a company with worldwide sales of £1billion. The latest rise in the success of online stores has been stimulated by a number of pre-Christmas events such as Black Friday and Cyber Monday which have helped draw yet more custom to the internet.

Tesco is asking staff to pledge to improve diet to fitness and getting more sleep as part of a voluntary programme. The retailer is handing out free fruit and vegetables to staff at its 2,600 stores, offering free health checks and even providing advice on mental health as part of Colleague Health Month. It includes a free health review with healthcare provider Nuffield and a new online eLearning tool on mental health awareness. The company promises to donate £1 to charity for each employee that makes a pledge as part of the scheme. The initiative has received a broadly positive response from staff, although the unofficial online forum for Tesco staff, Very Little Helps, is a dig at the company’s slogan.

Mike Ashley’s Sports Direct sportswear firm is considering placing famous brands including Lonsdale and Donnay up for sale this year after the successful sale of Dunlop last month. Senior staff have been discussing options to reduce the portfolio to focus on more relevant brands to go upmarket. The disposal of boxing brand Lonsdale is among the options being discussed at the highest level, whilst its other boxing brand, Everlast, and tennis label Donnay could also be up for grabs. Ashley may also use the opportunity to reduce his portfolio of lifestyle brands, which include fashion outlet Republic.

Bankers are licking their lips ahead of a bumper £15billion bonus season in what could be their best year for almost a decade. Those set to benefit include disgraced advisers to former BHS owner Sir Philip Green. Goldman big names in line for vast sums include Michael Sherwood, co-head European operations, expected to pick up more than the £17 million he grabbed in 2016. Colleague Anthony Gutman is also likely to do well. Both were heavily criticised for their role advising Sir Philip Green on his disastrous sale of department store chain BHS.

Homewares giant Dunelm has recruited the former boss of George at Asda to help boost growth. The appointment of Fiona Lambert as product director at the £880million-turnover store chain was announced at its head office on Friday. The homewares retail market is increasingly driven by fashion. Last year Dunelm bought children’s brand Kiddicare, general merchandise site Worldstores and home brand Achica as it seeks new avenues for growth.


Morrisons and Marks & Spencer are expected to emerge as winners from Christmas trading as the gulf between online players and those with high street stores continues to widen. Weak high street sales mean there are concerns about how Majestic Wines and Bonmarché have fared. Strongest performances continue to come from those with greatest online presence sales jumps expected of 30pc and 46pc for Asos and Boohoo. Debenhams, Morrisons, and Tesco are all expected to have fared well but Marks & Spencer is set to surprise the most. Debenhams is expected to eke out 0.5pc of like-for-like sales growth, boosted by makeup products. Primark owner Associated British Foods could also return to form, posting a 2pc rise in like-for-likes on the back of demand for cheap knitwear. Morrisons is expected to lead with a 2.5pc rise in like-for-like sales on the back of its turnaround efforts and introduction of premium range The Best. Tesco is expected to post 2pc like-for-like sales growth over the third quarter with a dip in the shorter four week run-up to Christmas when shoppers turn to Marks & Spencer and Waitrose for their festive treats. Sainsbury’s is expected to suffer the lowest growth with a 0.5pc dip in sales although the group’s online operations will toast a record Christmas.

An entrepreneur who started his business trading Mexican pine timber on eBay is set to make more than £100m from selling a stake in one of the UK’s largest furniture chains. Jason Bannister, founder of Oak Furniture Land, is looking to sell a chunk of the retailer to help fund US expansion plans. The company has been valued at around £400m after rapidly growing its sales to top £300m last year, PwC has been hired to approach potential new investors.


Fashion chain Next rocked the City last week as it admitted to having had a gloomy Christmas, after a poor year, and warned of an even gloomier outlook for 2017. Next news of poor performance dragged down the share prices of Marks & Spencer and others. Even Next’s ever-reliable winter sale was a disappointment, with sales down 7% on last year. Store sales in the weeks before Christmas were down 3.5%, and profits for 2017-18 could come in a full £100m below market forecasts thanks to extra costs from rises in the minimum wage for over-25s, business rates and the new apprenticeship levy. Shares plunged 14% and are now changing hands at just over £40, valuing the chain at £6bn, down from almost £80 little more than 12 months ago. And even £40 is too high for Next boss Lord Wolfson, it would seem. In recent years he has bought back shares worth hundreds of millions of pounds. Now he has chosen instead to pay special dividends a move that suggests he still doesn’t think the shares are good value.

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