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Two weeks in retail - 16th January 2013

With a number of Christmas trading updates already in, a clearer picture is emerging of sales over the Christmas period and, as ever, there has been a mixed bag of results.

Jessops has become the first casualty of 2013 after it entered administration last week. All 187 stores closed this week with the loss of 1,370 jobs. The retailer blamed competition from online rivals and a rise in the use and sophistication of smartphone cameras.

Music retailer HMV followed closely on the photographic specialists heels largely for the same reason having struggled over Christmas and suffering at the hands of online downloads as the world changed around it. Sadly there will likely be more in the coming weeks as analysis post-Christmas continues.

Update - Blockbuster has become the latest household High Street name to call in the administrators. On the 16th January, Deloitte, the business advisory firm, were appointed Joint Administrators to Blockbuster Entertainment Limited and Blockbuster GB Limited.

In the run up to Christmas footfall patterns were similar to that of the previous year according to Ipsos Retail Performance whose Retail Traffic Index measures the level of footfall in non-food stores across the UK.

The figures showed that shopper numbers in the week beginning 23 December were up 28.3% compared to November.

For December as a whole like for like sales in the retail sector rose only 0.3% against a 2.2% rise in the same month in 2011, according to the British Retail Consortium KPMG Retail Sales Monitor.

Total sales were up 1.5% against December 2011.

When it came to trading updates Next and John Lewis were amongst the first to report – each revealing strong trading over the festive period.

Continuing the strong department store trend both Debenhams and House of Fraser both posted what they claimed were record Christmas results. Debenhams said it saw its highest ever December like for like sales – up 5% for the five weeks to January 5. Like many of its rivals online growth was also particularly strong – up 39%.

House of Fraser meanwhile saw a 6.3% rise in like for likes for the six weeks to January 5 with record sales in the fortnight before Christmas.

Menswear specialists Moss Bros and Ted Baker also reported strong results with a 2.7% increase in like for like sales in the first half for Moss Bros and a 9.5% rise in like for like cash gross profit for the 24 weeks to January 12 – upgrading its full year expectations as a result.

Ted Baker meanwhile reported retail sales up by 20.9% for the eight weeks to 5 January whilst Fat Face saw store sales up 11% in the five weeks to 1 January and online sales up 65%.

Amongst the supermarkets Tesco saw like for likes rise 1.8% in the six weeks to January 5, boosted by online and food sales. Group sales increased 3.9%. The supermarket giant said Tesco Direct sales were up by more than 16% and online food sales up by 18%.

Sainsbury’s said it had its strongest ever trading in the week before Christmas with a record breaking £16 million of sales recorded in one hour between 12pm and 1pm on Sunday 23 December as well as its best ever Christmas Eve. Like for like sales rose 0.9% in the 14 weeks to 5 January. Sales of general merchandise and clothing grew fastest over the period.

For many other of the UK’s biggest names the news was not so good, including Morrisons which reported a “disappointing” performance with a fall in like for likes of 2.5% for the six weeks to December 30. As others reported strong online sales Morrisons admitted it was partly hit by its lack of an online presence for the brand.

Meanwhile Marks and Spencer attracted some of the harshest headlines after it had to rush its results out early following a leak on its performance. It revealed a 1.8% fall in like for like sales over the 13 weeks to 29 December, hit particularly by a 3.8% fall in sales of general merchandise for which it blamed a challenging and highly promotional market.

Total UK sales in the quarter rose only 0.3%. Food performed a little better with record food sales of nearly £330 million over the two key Christmas trading weeks.

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