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Market Commentary

​​Weekly Retail & Leisure News - 05 January, 2015

Next and John Lewis early Christmas winners

Next has emerged as one of the early Christmas winners, after reporting total sales were up 2.9% in the two months to Christmas Eve, a solid result particularly when viewed against tough comparatives from last year, when total sales increased by 11.9%. While sales at physical stores were only just in positive territory, Directory sales were up by an impressive 7.5%.

John Lewis has also reported strong Christmas sales. In the five weeks to December 27 total sales were up 5.8% to £777m. LFLs increased 4.8%, driven by online growth and click and collect. The omnichannel advantage helped stimulate last minute purchases towards the end of the Christmas trading period when many customers took advantage of click and collect. Another change in trading saw the number of collections from store – some 56% of all online orders – overtake home delivery.

It seems that both Next and John Lewis are benefiting increasingly from their omnichannel capabilities. We expect this to be a Christmas trend, whereby the high street fares reasonably well, but any sales growth tends to be driven by multichannel in general, and by click-collect in particular. And with credit rating agency Moody’s forecasting other Christmas winners to include Debenhams and House of Fraser (both with strong, and in Debenhams’ case much-improved, online services), healthy department store growth is likely to be another Christmas trend over the next couple of weeks.

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