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Market Commentary

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 09​​​​​​​​​​​​​ January, 2016​

​​​​Early Christmas winners revealed

As results from the Christmas trading period start to filter in, it is clear that retailers enjoyed contrasting fortunes over the festive season. Aldi reported strong results and record Christmas trading as sales rose 15% in December. Strong LFLs were also reported by Mountain Warehouse, up 13.6% in the six weeks to January 1, while total sales rose 28.8%. B&M reported record LFL growth of 7.2% in the quarter to December 24, while total sales jumped 20.5%. LFLs at Boux Avenue rose 16.6% in the six weeks to December 24. Mamas & Papas LFLs rose 11% in the 13 weeks to 25 December, driven by a rise in personal shopping and Black Friday sales. And John Lewis saw sales soar before Christmas, up 36% YoY in the week to December 25; the following week, however, sales fell 9.4%.

Many of these positive results were boosted by discounting in the run-up to Christmas. Other retailers chose not to discount in any of their stores or online; helped by its strong tourist appeal, sales at Selfridges rose 18% in December, with a no discounting strategy. And Jigsaw reported a sales rise of 10% in the five weeks to December 31, again with no discounting before Christmas, including Black Friday.

However, the tough underlying conditions on the high street for clothing and footwear retailers were underlined by Next’s results. Next issued a profit warning after sales leading up to Christmas were weaker than expected, down 0.4% in full-price sales in Q4 to December 24, while its end-of-season sale fell 7%. Profits in the next financial year are now expected to be up to 14% lower than this year's. Next also warned that 2017 may be a challenging year, with the weaker pound contributing to higher prices, eating into shoppers’ spending power.

For further insight into the prospects for retailers in 2017, please tune-in next week, when we will be revealing our 2017 Property Predictions.

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