Today, we examine what impact the Christmas period has had on specific UK retailers. M&S has seen a mixed Christmas, Boots has reported some decent improvements in sales, but Poundland has had to place many of its stores into temporary hibernation.
Mixed Christmas for M&S as lockdown disrupts normal trading
As we briefly touched on during Fridays article, M&S have not seen the best Christmas, yet they have claimed its trading was ‘robust’ over the Christmas period, although modest growth in food sales was not enough to offset big declines in its clothing division because of store closures during the period. In the 13 weeks leading up to the 26th of December, the group’s total UK like-for-like sales slipped 7.6% after the business was impacted by ‘on-off restrictions and distortions in demand patterns’ related to the pandemic.
In its Food division, which has recently undergone a major overhaul, like-for-like sales increased by 2.6%. That figure rose to 5.7% when the impact of the closure of its hospitality activities was stripped out. Sales ex-hospitality and franchise were up 8.7% in the four weeks before Christmas with large retail park and Simply Food stores ‘significantly outperforming’, countering lower footfall in towns and city centres.
Boots reports improved quarter
Boots recorded further falls in sales and profits in its last quarter, although the declines were not as bad as those posted earlier in the pandemic. First-quarter results to 30th of November from parent company Walgreens Boots Alliance (WBA) showed total sales in its British chain were down 11.5% as shopper numbers continued to be reduced by the crisis, particularly in high street, train station and airport locations.
Like-for-like sales across its retail division slipped 9.1%, although this was an improvement on the 29.2% and 48% declines recorded in the previous two quarters. The group stated that a recovery in footfall trends in September and October was set back by the re-introduction of stricter restrictions in November. However, its online store continued to perform well with sales surging up 106%.
Boots highlighted that its market share decreased in all categories, except beauty. The business attributed this to the impact of the ongoing pandemic on consumer shopping habits and spending temporarily shifting as consumers favoured one-stop grocery shopping.
In the Boots pharmacy operation, like-for-like sales increased by 2.5% during the period. This was said to have reflected the favourable timing of NHS reimbursement, which mitigated the impact of lower prescription volume and reduced demand for pharmacy services during the pandemic.
Poundland placing 44 UK stores into temporary hibernation
Poundland is placing 44 of its UK stores into temporary hibernation from the end of trading on Saturday (9th of January) as a result of the ongoing lockdown restrictions. The budget retailer has said the move is to protect the business in the short-term and reflects the 80 per cent drop in footfall at shopping centres and highstreets across the country.
Poundland is replicating the measures it took during the lockdowns throughout 2020, with 44 or its 800-plus stores to be temporarily hibernated. As an essential retailer, most of its stores will remain open to serve customers in their communities.
In the first 2020 lockdown last March, Poundland hibernated around 120 stores and was able to start reopening them from the end of May. Hibernation allows the retailer to focus workers in a slightly smaller number of locations and provide a better service to communities in consolidated stores.