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Gone are the days, it seems, when the country’s stores raked it in all during December and the January sales.
Next (NXT) is counting its best Xmas trading days on the fingers of one hand and has been reduced to blaming warm weather in November and December for its disappointing fourth quarter figures. In fact so desperate is it to shift the blame away from management that today’s trading update actually includes pages dedicated to a comparison of 2014 and 2015’s weather.
Gone are those happy days before the age of computer controlled stock, when, if it rained, stores immediately brought out wellies, brollies and macintoshes. Now they are all stored in some distant central depot in the Outer Hebrides, head office is in London where it is bright and sunny but its pouring down in Leeds and Manchester. By the time the brollies and wellies have arrived in Manchester it has brightened up there but its pouring down in London. The logistics industry was created to make sure that goods were in stock where they were needed and when they were needed but the big retailers do not seem to have quite got their corporate act together on this. Solution – remember, the United Kingdom does not have a climate, it has weather and stock your shop accordingly and like good boy scouts, be prepared.
Next does have the decency to admit that poor stock availability from October onwards was a big factor in its weak results, so presumably there may be a sacrificial lamb or two selected from stock control which will allow the rest of management to get away scot free. End of season sale stock was down by 7%. but there is no explanation as to why.
Full price sales growth for the Christmas period was 0.4% but for the year as a whole it was a much higher 3.7%, a sign of how wrong Next got its Christmas.
John Lewis Partnership showed growth of 4.1% over the 6 week Christmas trading period to the 2nd January and claims trading was strong but like for like sales at Waitrose actually fell by 1.4%, hardly a creditable performance, except in the eyes of the company. What puts that figure into perspective is that its record trading days were limited to two only, the 23rd and 24th December when Waitrose sales rose by 6% and 5.5% respectively.
Further evidence of the change in shopping habits is provided by the clearance sale in the week to 2nd January, which saved the day for Lewis’s with sales rising by 23% over the week and no doubt helping the six week total to climb to 4.1%. but at what cost, may one ask, to profits.
The New Year sales were always an event. Now they are just something else to do on Boxing Day, if you don’t fancy Wetherby races.
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