Marks & Spencer added to the retail blues in the UK this week after its Christmas sales disappointment, but it was not all doom and gloom in a mixed week for the sector.
M&S saw its stock dive to levels not seen for more than two years after revealing that third quarter sales fell by 2.2% on a same store basis.
Stuart Rose, M&S chief executive, added that the slowdown in consumer spending was unlikely to ease until well into 2009, spelling high street misery for retailers.
But a robust festive performance from retail giant Sainsbury’s just a day later suggested that hard-pressed consumers had not cut back on their supermarket spending this Christmas.
The UK’s third largest grocer delivered a 3.7% hike in like-for-like sales, excluding petrol, with products in its basic and top-end Taste the Difference ranges flying off the shelf.
The news saw praise piled on chief executive Justin King, despite market share figures that revealed Sainsbury’s sales may have lagged behind its rivals Tesco, Asda and Morrisons.
Encouraging sales figures from department store chain House of Fraser and upmarket grocer Waitrose added to the view that there would be both winners and losers from this year’s festive period.
Privately-owned House of Fraser group pulled off a 2.4% rise in like-for-like sales in the five weeks to January 3, with margins also up.
Meanwhile, Waitrose said that sales in the five weeks to January 5 were ahead 6.1% on a year earlier.
The figures defied British Retail Consortium data, which had showed that December sales grew at their weakest rate for three years, rising just 0.3% last month.
JD Sports owner John David Group also offered hope for the high street after it reported a forecast beating 9.3% surge in like-for-like sales in the eight weeks to January 5.
The group said its “pleasingly positive” Christmas would see full-year profits come in higher than expectations.
JD Sports is less reliant on replica kit sales than its rivals JJB and Sports Direct, but it said it had also boosted sales with a focus on marketing, IT and merchandising support.
While like-for-like clothing sales were flagging at M&S, JD Sports said its fashion-based outlets saw same store sales increase by 16.6% and sports-focused stores enjoyed an 8.8% rise.
Fashion firm Alexon, which owns Bay Trading, also bucked the trend, with a late trading pick-up boosting Christmas sales that it said was likely to see full-year profits come in better than first feared.
But the cheer did not spread into the high street jewellery sector, with H Samuel owner Signet posting a 6.8% drop in sales in the eight weeks to December 29.
The group, which also trades as Ernest Jones in the UK, was hit by falling sales in its domestic market and in the US.
While Signet did not issue a profit warning, having already cautioned over this year’s profits, market expectations edged lower after the downbeat sales assessment.
Regional department store chain Beale did warn over profits as a result of dire Christmas trading. It said footfall reduced “markedly” in December, knocking like-for-like sales by 6% in the nine weeks to January 5 and leaving it unlikely to meet its targets for trading in 2008.
Retail analyst Nick Bubb, of Pali International, said it had been “carnage” in the sector this week as focus remained on the poor figures from the likes of M&S, Signet and Beale.
He added the market “was afraid of more shocks” in next week’s slew of retail results, with HMV, Woolworths, Comet parent Kesa Electricals and supermarket giant Tesco due to update on festive trading.