The high-street Christmas winners and losers have started to emerge as some of the UK’s biggest chains unveiled a host of unexpected results.
Topping the list of surprises was supermarket Tesco, which defied all expectations by recording the first festive sales rise for four years – up 1.3 per cent on a same-store basis in the six weeks to 9 January – while bottom of the pile was Argos, which analysts suggested looked ripe for another takeover approach from Sainsbury’s.
More details about the sale of Homebase to Australian outfit Wesfamers also emerged, with the former Asda boss Archie Norman thought to have played a pivotal role in bringing the £340m deal together.
Elsewhere JD Sports, Asos, Primark, Mothercare and SuperGroup all revealed strong numbers, but B&M joined Argos and Homebase’s parent company Home Retail Group in slipping on a day dubbed “Super Thursday”.
Tesco achieved the standout performance, although chief executive Dave Lewis cautioned against celebrating too soon, warning that the threat of discounters Aldi and Lidl still loomed large.
He said: “I think the challenges in the industry didn’t change because of one set of numbers. I think deflation still has some way to go and there are some challenges in the industry around business rates, the living wage and the apprenticeship levy.”
However, he also revealed that third-quarter UK sales, which were down 1.5 per cent, fell due to an end to excessive vouchering.
JD Sports also put in a strong performance over the Christmas period as sales jumped 10.6 per cent. It issued a second profit upgrade in the space of six weeks, just six days after bigger rival Sports Direct warned on profits.
But the worst performer was Home Retail Group, which revealed that sales at Argos dropped by 2.2 per cent, despite heavy discounting. It admitted that profits, hit particularly by a fall in the sales of electrical goods, will now be at the lower end of expectations.
Analysts said this left the company vulnerable to another approach by Sainsbury’s, especially as Homebase had nearly been sold.
